S. Korea passes bill requiring Apple, Google to accept other payment options

South Korea’s parliament has passed a bill which will bar tech companies operating app stores in the country including Apple and Google from requiring developers to use their own payment systems that charge them up to 30%.

The amendment to the Telecommunications Business Act, dubbed ‘’Anti-Google law’’, was approved by the parliament’s legislation and judiciary committee last week and submitted to the final vote at the National Assembly yesterday.

The bill was accepted by a majority of 180 of the 188 participated and will now require app store operators including Google and Apple to allow developers to use alternative payment systems. 

Apple last week said it was concerned that alternative payment systems will put users at risk of fraud and privacy violations.

‘’The proposed Telecommunications Business Act will put users who purchase digital goods from other sources at risk of fraud, undermine their privacy protections, make it difficult to manage their purchases, and features like “Ask to Buy” and Parental Controls will become less effective,’’ the company said. ‘’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 Korea who have earned more than KRW8.55 trillion to date with Apple.’’

Wilson White, the Director of the Public Policy & Government Relations team at Google, said ‘’the rushed process hasn’t allowed for enough analysis of the negative impact of this legislation on Korean consumers and app developers.’’

Another Google spokesperson said: “We’ll reflect on how to comply with this law while maintaining a model that supports a high-quality operating system and app store, and we will share more in the coming weeks.’’

Both Apple and Google have been under fire for the app store commissions they charge developers for each in-app purchase users make. 

Last year, Apple lowered the 30% fee to 15% for developers earning less than $1 million each year and Google reduced it to 15% for the first $1 million earned each year. 

Meanwhile, Apple last week announced that it settled a lawsuit filed by US developers against its App Store practices and said it will now allow developers to use communications such as email to inform users about external payment methods.