South Korean lawmakers yesterday passed a law banning tech giants Apple Inc and Alphabet Inc’s Google from forcing app developers to use their payment systems, effectively declaring their lucrative App Store and Play Store monopolies illegal.
The bill was approved by 180 votes to nil in the National Assembly, making South Korea the first major economy to pass legislation on the issue, in a move that could set a precedent for other jurisdictions around the world.
In the US, three senators this month introduced a bill to loosen the tech firms’ grip on their stores, while in Europe, lawmakers are debating legislation that could force Apple to bring in alternatives to the App Store.
The South Korean measure comes as Apple and Google face global criticism for charging up to 30 percent commission on app sales and requiring use of their own payment systems, which collect a share of the transactions.
The law would offer users a choice of app payment providers, enabling them to bypass charges set by the store owner.
“This law will certainly set a precedent for other countries, as well as app developers and content creators worldwide,” said Kang Ki-hwan of the Korea Mobile Internet Business Association.
It is expected to come into force next month, reports said.
“Without this law, our working environment — where creators are guaranteed of full rewards for their efforts — would’ve been destroyed,” said Seo Bum-gang, a webtoon artist who heads the Korea Webtoon Industry Association. “We need this law to protect the diversity of our industry.”
Apple and Google have maintained that the commissions charged are standard in the industry and fair compensation for building safe marketplaces where developers can reach people around the world.
Ahead of the debate, Apple said that it would put digital purchasers at risk of fraud, undermine their privacy protection and render parental controls less effective.
“We believe user trust in App Store purchases will decrease as a result of this proposal — leading to fewer opportunities for the over 482,000 registered developers in [South] Korea who have earned more than 8.55 trillion won to date with Apple,” it said in a statement.
Google Korea did not respond to requests for comment.
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