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Google and Apple forced to open app stores

by on01 September 2021

At least in South Korea

Google and Apple will have to open their app stores to alternative payment systems in South Korea threatening their lucrative commissions on digital sales.

A bill passed Tuesday by South Korea's National Assembly is the first in the world to dent the tech giants' dominance over how apps on their platforms sell their digital goods. It will become law once signed by President Moon Jae-in, whose party strongly endorsed the legislation.

The law amends South Korea's Telecommunications Business Act to prevent large app-market operators from requiring the use of their in-app purchasing systems. It also bans operators from unreasonably delaying the approval of apps or deleting them from the marketplace -- provisions meant to head off retaliation against app makers.

Companies that fail to comply could be fined up to three per cent of their South Korean revenue by the Korea Communications Commission, the country's media regulator. The law will be referenced by regulators in other places -- such as the European Union and the US -- that also are looking at their global tech companies.

Yoo Byung-joon, a professor of business at Seoul National University who researches digital commerce said: "Korea's decision reflects a broader trend to step up regulation of technology-platform businesses, which have been criticized for having too much power."

Last modified on 01 September 2021
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