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Apple-Google duopoly on app store market: South Korea to pass new law

A new law would give customer's free choice on app payment providers

August 31, 2021 / 05:40 PM IST
The new law would allow alternative payment systems to exsist

The new law would allow alternative payment systems to exsist

South Korea is on the verge of passing a law that will see Apple and Google's duopoly on the app store market challenged. The new law called "The Telecommunications Business Act" would force Apple and Google to open up their app payment systems, giving user's choice of more app payment providers.

Speaking with The Print, Analyst Guillermo Escofet said, "This could presage similar actions elsewhere. Regulators, lawmakers and litigators in North America and Europe are also scrutinizing app-store billing rules, and the overriding political mood has become hostile to the enormous amount of power concentrated in the hands of the tech giants.”

The new law would allow app developers and companies to transact with the user directly instead of going through a payment system made by Apple and Google, which includes a commission on everything sold within the app store.

This commission is also at the heart of the ongoing legal trials between Epic Games, creators of Fortnite, and the dual dominance of Apple and Google within their app store ecosystems.

Google recently announced a plan to introduce 30% commissions on the Play Store in the country starting in October. This decision by the search giant has reversed a long exemption that it had provided to the country.

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If the law is passed, it may spur other countries to follow in South Korea's footsteps and could potentially cut-off a stream of strong revenue for Apple and Google.

According to reports from sensor tower, Apple's app store gives the company $20 billion in revenue annually.

Update (31/08/21):

Rakesh Deshmukh, CEO of Indus App Bazar, supported the move saying telling us in a statement that, "policy needs to support innovation. I hope that third-party stores like ourselves are allowed a fair play environment on Google Play and Android as detailed by Google in their blog dated 28th September 2020. Furthermore, in India, we need to look into developer choice for payment gateways with a reduction in transaction charges."

Anand Singh, Head of developer app relations said, "we have always strived to give developers a choice from the beginning of their journey. The ability to integrate the best payment solution empowers them to reinvest the capital into their R&D department. We believe that this will enable more innovative local solutions to truly go global."
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first published: Aug 31, 2021 11:13 am
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