New S Korea law may test Apple, Google duopoly
Aus, too, plans laws for their wallets
South Korea is expected to become the first country to pass a law ending Apple and Google’s domination of payments on their mobile platforms, setting a potentially radical precedent for their app store operations everywhere from India to the US.
Apple and Alphabet’s Google, the effective duopoly controlling most of the world’s smartphones, face a raft of legislative measures in the US rebuking their “gatekeeper control” and urging a curb on their power to dictate terms on app marketplaces. Both charge a fee of typically 30 per cent on purchases made on their stores and exclude alternative payment handlers, arguing it protects users from fraud and privacy invasion.
Now, Korea’s government is taking direct action to end that dominance. The Telecommunications Business Act would mandate giving users a free choice of app payment providers. The bill, which is almost certain to pass an assembly vote given the ruling party’s super-majority, opens the door for firms like Fortnite maker Epic Games to transact directly with users and bypass the platform owner’s charges. Epic has taken the IOS and Android owners to court in various jurisdictions arguing their fees are unfair.
The bill, originally slated for a vote Monday, was delayed by other legislation and will now go before lawmakers at a future plenary session.
“This could presage similar actions elsewhere,” said Omdia analyst Guillermo Escofet, who specialises in digital consumer platforms. “Regulators, lawmakers and litigators in North America and Europe are also scrutinising 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.”
Trouble in Oz
The Australian government is considering new laws that would tighten the regulation of digital payment services by tech giants, such as Apple and Google. Treasurer Josh Frydenberg said he would “carefully consider” that and other recommendations from a government-commissioned report into whether the payments system had kept pace with advances in technology and changes in consumer demand. Services such as Apple Pay, Google Pay and China's Wechat Pay are not currently designated as payment systems, putting them outside the regulatory system.