Tech

They’ve only gone and done it – South Korea forces Apple and Google to allow alternative payments

South Korea’s parliament has passed a law that requires Apple and Google to offer third-party payment options in their app stores.

The Partial amendment to the Telecommunications Business Act passed through the National Assembly on Tuesday. It now awaits the formality of presidential assent before passing into law.

As we’ve previously reported, the law prevents players with dominant market positions from restricting payment options in their software, either to pay for apps or for in-app purchases.

As such, it is aimed squarely at Google and Apple.

The latter has warned that the law will expose its customers to fraud, as alternative payment providers may not offer the same level of supervision that Apple offers. Google has complained that the fees it collects from its Play store help to fund the ongoing development of Android.

The Asia Internet Coalition, Big Tech’s regional lobby group, has issued a statement [PDF] that labels the new law “disheartening” and warns it “may contravene the country’s international trade commitments.”

That remark is code for pointing out that trade agreements may give the USA grounds to move against South Korea for making life hard for American companies.

“These expressly discriminatory amendments tilt the playing field in favour of Korean domestic app markets and will ultimately hurt Korean app developers and end-users that value the services provided in the current Korean mobile app ecosystem,” the Coalition adds.

The statement doesn’t acknowledge that South Korea is one of the few nations in which Google and Microsoft don’t enjoy utter market dominance. Naver, a search engine and portal, has more than 50 per cent market share. Hancon, a vendor of personal productivity software, has managed to keep Microsoft Office’s market share below 80 per cent.

The nation’s government uses Hancon’s file format for documents downloadable from its web sites – a demonstration of pride in local tech companies and their success keeping tech giants at bay.

App-makers have mostly been quiet about the law. Epic Games, which has fought against payments monopolies of both Apple and Google, is silent on the decision at the time of writing. The Match Group, purveyor of dating app Tinder, has welcomed the law as a welcome correction of the app market.

Reaction is otherwise muted. No other nation has comparable laws in the legislative pipeline, although Google and Apple face investigations into their market power in Australia, the EU, and the USA. ®

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