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Wednesday, December 8, 2021

South Korean Lawmaker Says Apple and Google Are Not Enforcing App Store Laws

SEOUL. Apple Inc and Google Alphabet are not doing enough to comply with South Korean law that prohibits dominant app store operators from forcing app developers to use their payment systems, the lawmaker who initiated the amendment told Reuters.

South Korea, the first country to introduce a law restricting payment policies of tech companies, is expected to release initial details of what is required to comply with the law on Wednesday, a spokesman for the Korea Communications Commission (KCC) said.

In August, he amended the Telecommunications Business Act to try to curb market dominance by large tech companies and prevent large app store operators from charging commissions on in-app purchases.

The law went into effect in September, but the details of what will count as compliance are being worked out by the KCC in an enforcement order.

Apple has told the South Korean government that it already complies with and does not need to change its nL4N2RB0QK app store policy. Google said it plans to allow third-party payment systems nL1N2RV03J in South Korea, but will cut developer service fees by only 4 percentage points when users opt for an alternative billing system.

Tech companies charge developers up to 30% of their sales for in-app transactions.

“To be honest, we’re not satisfied … Apple’s claim that it is already complying is pointless,” said MP Cho Seung-lae, who led the amendment.

“Excessive fees deny developers the chance to innovate … Parliament must be well informed as the government develops detailed rules to ensure accountability,” Joe said.

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Apple and Google did not immediately respond to requests for comment.

First in the world

“This is the first law in the world to give the market a chance to break the duopoly with Apple and Google,” Tim Sweeney, CEO of Epic Games, creator of Fortnite, and a high-profile critic of Apple, told Reuters.

Fortnite launched in the Apple and Google app stores last year after Epic unveiled a new payment system.

But even if Apple takes the same position as Google, introducing a commission, allowing external payments, Epic Games will not accept such a position, since Apple and Google, by charging any commission or taking control of competing payment services, “destroy the competition point.” , – he said. added.

The KCC is developing “finely woven” regulatory details for the ordinance, which will be reported to the parliamentary committee on Wednesday and put into effect by March next year, KCC vice chairman Kim Hyun said at the App Ecosystem Equity Conference on Tuesday.

However, it is unclear what the penalties will be for breaking the rules.

An early draft enforcement order seen by Reuters detailed a fine of up to “2 percent of income” as a fine for breaking the law by app market operators.

“In other jurisdictions, we’ve seen that these monetary fines don’t really deter companies like Apple and Google because it’s just a drop in the bucket for them,” said Megan DiMusio, executive director of the Coalition for App Fairness advisory group.

Joyce Lee

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