Shanghai Daily

Seoul cracking down on Internet giants over apps

- TECHNOLOGY

SOUTH Korea’s parliament yesterday approved a bill that bans major app store operators such as Google and Apple from forcing software developers to use their payment systems, effectivel­y stopping them from charging commission­s on inapp purchases.

It is the first such curb by a major economy on the likes of Apple Inc and Alphabet Inc’s Google, which face global criticism for requiring the use of proprietar­y payment systems that charge commission­s of up to 30 percent.

The final vote was 180 in favor out of 188 attending to pass the amendment to the Telecommun­ications Business Act, dubbed the “Anti-Google law.”

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

Google added Google Play provides far more than payment processing, and its service fee helps keep Android free, giving developers the tools and global platform to access billions of consumers around the world.

“It’s a model that keeps device costs low for consumers and enables both platforms and developers to succeed financiall­y.

“And just as it costs developers money to build an app, it costs us money to build and maintain an operating system and app store.”

Apple responded to an email reiteratin­g a statement issued last week. “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 8.55 trillion won (US$7.38 billion) to date with Apple,” Apple said in a statement.

Based on South Korean parliament records, the amendment bans app store operators with dominant market positions from forcing payment systems on content providers and “inappropri­ately” delaying the review of, or deleting, mobile content from app markets.

It also allows the South Korean government to require an app market operator to “prevent damage to users and protect the rights and interests of users,” probe app market operators, and mediate disputes regarding payment, cancellati­ons or refunds in the app market.

Historic action

“Today’s historic action and bold leadership by South Korean lawmakers mark a monumental step in the fight for a fair app ecosystem. The legislatio­n passed today by the Assembly will put an end to mandatory in-app purchase in South Korea, which will allow innovation, consumer choice, and competitio­n to thrive in this market,” a spokespers­on at Match Group, which owns the popular dating app Tinder, said in a statement.

The Korea Internet Corporatio­ns Associatio­n, a nonprofit group representi­ng Korean IT firms, also welcomed parliament’s decision.

“We hope that the passage of this bill will ensure the rights of creators and developers, and create a fair app ecosystem, where users can enjoy diverse contents at lower prices.”

Apple on Thursday agreed to loosen App Store restrictio­ns for small developers, allowing developers to promote payment options outside Apple’s payment system.

Earlier this month in the United States, a bipartisan trio of senators introduced a bill that would rein in app stores of companies that they said exert too much market control, including Apple and Google.

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