South Korea: Law to lift Google’s and Apple’s app restrictions

Apple and Google operate a strict in-app purchase policy. This is now set to change in South Korea: A law to force the companies to open up has been introduced. Apple and Google are fighting back.

App store is strictly regulated

The two largest providers of smartphone operating systems earn money with them primarily through the app stores: They decide which apps are available there and under what conditions in-app purchases are possible. Both companies have decided to make these purchases exclusively processable via their own payment structures – and in this way earn from every sale made in an app purchased via the respective store. In this way, the companies secure shares of up to 30 percent of all sales.

Proposed legislation in South Korea

A draft law is now intended to change this circumstance in South Korea. The bill, which was approved in the relevant parliamentary committee on Wednesday, would ban Apple’s and Google’s current business policies and significantly change the market accordingly. However, the vote on the bill, also scheduled for Wednesday, was postponed, so it is not yet clear whether it will be adopted.

The bill now presented is not the only point of attack in the fight against the previously applicable rules. For example, Epic Games has filed a lawsuit in the U.S. – and is also targeting the mandatory use of the respective payment system or the associated high levy on Google and Apple.

Under the pressure so far, the two companies have already partially given in and at least granted price discounts to individual companies. However, they have not been willing to change the fundamental business structure so far. So it’s hardly surprising that they are also fighting the legislative initiative in South Korea with all means at their disposal. Apple, for example, pointed out that such a change would facilitate fraud and endanger users accordingly. Google aimed in a similar direction, pointing out that there had not been enough time in the legislative process to assess possible negative consequences. Google and Apple, according to the New York Times, have furthermore tried to persuade the U.S. government to prevent the law.