Google and Apple can’t force in-app payments in Korea.

Google and Apple

In the future, app market operators such as Google and Apple will not be able to force their payment systems.

The National Assembly held a plenary session on the 31st to deal with the “Google in App Payment Prevention Act,” an amendment to the Telecommunications Business Act that stipulates the prohibition of app market operators. The passed law comes into force immediately after promulgation. It is the first time in the world that Korea has enacted regulations on in-app payments, an internal payment system for app market operators such as Google and Apple, since the related bill was first proposed in July last year. This is likely to affect other countries such as the U.S., the U.K., and others who are discussing related laws. In addition, Google’s new app market policy, which was to force in-app payments for digital contents such as music, webtoons, and web novels from October, is unlikely to be applied in Korea.

The revised law prevents app market operators from forcing certain payment methods to app developers who have entered their app markets. It also includes provisions that prevent unfair delays in content screening or deletion without justifiable reasons. However, due to overlapping regulations with the Fair Trade Act, the “exclusive conditional transactions” that prevent exclusion of competitors and the prohibition on unfair discrimination were omitted from the existing system.

Google announced in September last year that it will make payment for in-app mandatory for all digital contents in the future. If you use in-app payment, you have to pay 15% to 30% of the payment amount to the app market operator as a fee. According to a survey conducted by the Ministry of Science and ICT last year on changes in app market fee policy, Google’s in-app payment fee is estimated to increase by at least 88.5 billion won and at most 156.8 billion won. Domestic platform companies such as Naver and Kakao, which have been using external payment methods rather than Google’s in-app payment, and other organizations of creators who were concerned about the cost transfer were strongly opposed to Google’s policy change.

South Korean content industries welcomed the passage of this law. “We expect that the rights of creators and developers will be guaranteed and a fair app ecosystem will be created where users can enjoy various contents at a lower price,” said the Korea Internet Business Association, which Naver and Kakao are members of. The Korea Startup Forum, a startup group, also said, “We hope that the change in policies between Google and Apple will take place as soon as possible as the law is actually intended.” The Korea Publishing Culture Association said, “The National Assembly’s decision confirmed once again internationally and externally that Korea is a leading country in the world IT policy field.”

On the other hand, Google and Apple are concerned about the influx of apps that do not use in-app payments. If payment is made outside the app market, it cannot be tracked and managed, so it will inevitably become vulnerable to consumer protection. “If digital products are purchased through other channels, users will be exposed to fraud and privacy will be weakened,” Apple said. Google said, “We are seeking to comply with the law while maintaining a high-quality operating system and a business model that supports app markets, and we will share related information within the next few weeks.”토토사이트

As it is the world’s first regulation on in-app payment, overseas countries are also paying attention to passing bills. Recently, the New York Times (NYT) reported that the U.S. administration has been at a crossroads between regulating Big Tech and protecting its own companies regarding South Korea’s Google bill. As South Korea passed a bill aimed at U.S. companies, it could be a trade issue, but if it hastily opposes it, it could violate the policy consistency of the Biden government’s big-tech regulations. Recently, the U.S. Senate proposed a bill that bans in-app payments like South Korea. CNBC reported, “South Korea voted at the National Assembly’s standing committee to ban the payment of in-apps for the first time among major countries.”

In the industry, there is a possibility that the game industry, which has been using in-app payments, will change its payment method. However, as it is effective in entering global markets and additional development costs are being incurred, it is in the midst of calculating profits and losses. “So far, we need to consider whether it is effective to make our own payment system by giving up on in-app payments that we have already used,” said an official from a large game company. “In particular, it may not change immediately because in-app payments are more efficient in overseas businesses.”

On the contrary, Google uses external payments, but Apple uses in-app payments such as webtoons, web novels, and music, which are different situations. An official from a content industry said, “Out-of-game content apps have already established an external payment system, so we plan to ask Apple to upload apps that can be paid outside on its App Store.”

Google and Apple can’t force in-app payments in Korea.

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