App Store owners wont be able to lock app developers into their 30% fees
South Korea is set to adopt legislation prohibiting Apple and Google from requiring payment in their app stores. App store owners will no longer be able to force developers to use in-house payment systems thanks to a change to South Korea’s Telecommunications Business Act. The bill also prohibits app store owners from arbitrarily delaying or removing programs from the marketplace, which the nation worries would be used as a form of retribution. The measure has cleared South Korea’s National Assembly (the country’s Congress equivalent), according to The Wall Street Journal, and President Moon Jae-in is poised to sign it into law.
Apple and Google take a 30% share of most app purchases, in-app sales, and subscriptions in the rest of the world, and they don’t allow developers to utilize alternate payment methods. Once the bill is passed in South Korea, app developers will be able to shop around for the best payment provider. User identification for transactions, friction-free purchases owing to saved payment information, and easy data storing and delivery for digital products are all advantages of Google and Apple’s shops. Standard credit card processors generally just take a 1-3 percent cut of sales if developers don’t require any of those items or are prepared to create their own solutions.
The Verge received statements from both Google and Apple. A Google spokesperson told the site, “Just as it costs developers money to build an app, it costs us money to build and maintain an operating system and app store. We’ll reflect on how to comply with this law while maintaining a model that supports a high-quality operating system and app store, and we will share more in the coming weeks.”.
Neither Google nor Apple provides exact app store revenue numbers, but analytics firm Sensor Tower estimates that the App Store facilitated $72.3 billion in global spending in 2020, while Google Play did $38.6 billion. In South Korea, Samsung dominates the smartphone market (and a bunch of other markets—Samsung is around 10-20 percent of South Korea’s GDP) with 67 percent market share in Q1 2021, according to Counterpoint Research. Apple picks up most of the rest with 22 percent. In third place, with a 10 percent market share, is another Korean company, LG, which quit the smartphone market in July 2021. With such a focus on Android, the bill has apparently been nicknamed the “anti-Google law” in South Korea.
The regulation in South Korea is the latest blow to Google and Apple’s app shops. Epic Games, the creators of the popular game Fortnite and the Unreal Engine. Has been fighting Google and Apple’s app store rules all around the world, either via litigation or negotiations with authorities. In the United States, 36 governments have sued Google, and several states are considering enacting their own app store regulations. To combat high app store fees, Epic, Spotify, MatchGroup (the owners of Tinder), and numerous other app developers. Have created the “Coalition for App Fairness” lobbying organization.