South Korea set to bar Apple, Google from charging commission on in-app purchases

South Korea is likely to bar Google and Apple from requiring software developers to use their payment systems, effectively stopping them from charging commissions on in-app purchases, the first such curbs on the tech giants by a major economy.

The Parliament’s legislation and judiciary committee is expected on Tuesday to approve the amendment of the Telecommunications Business Act, dubbed the “Anti-google law,” that takes aim at app store operators with dominant market positions.

If the Bill gets the committee's approval, it will be put to a final vote on Wednesday. Lawmakers in South Korea have pushed the issue of the commission structure since mid last year.

Alphabet Inc’s Google and Apple Inc were not immediately available for comment.

Both companies have faced global criticism because they require software developers using their app stores to use proprietary in-app payment systems that charge commissions of up to 30 per cent on in-app purchases.

“For gaming apps, Google has been forcing app developers to use its own payment system ... and it wants to expand its policy to other apps like music or webtoon,” said Kwon Se-hwa, a general manager at the Korea Internet Corporations Association, a nonprofit group representing Korean IT firms.

“If the new bill becomes the law, developers will have options to use other independent payment systems,” Kwon said. The European Union last year proposed the Digital Markets Act, taking aim at app store commissions.