South Korea passes bill aimed at app store dominance

South Korea’s parliament on Tuesday approved a first-of-its-kind law aimed at decreasing the dominance of the major app stores operators.

The bill, expected to be signed by President Moon Jae-in, would ban Apple and Google from forcing developers to use their proprietary payment systems.

That would allow developers to dodge the up to 30 percent commissions that the app stores charge on in-app payments.

The bill also reportedly seeks to protect developers from retribution by banning operators from unreasonably delaying the approval of or deleting apps from stores.

A spokesperson for Apple cautioned that the bill could put iPhone users at risk of fraud, undermine privacy and make it difficult to manage purchases.

“We believe user trust in App Store purchases will decrease as a result of this legislation — leading to fewer opportunities for the over 482,000 registered developers in Korea who have earned more than KRW8.55 trillion to date with Apple,” they added.

The Hill has reached out to Google for comment on the progress of the legislation.

The South Korean bill comes amid heightened international scrutiny of major app store practices.

The European Commission issued antitrust charges against Apple earlier this summer over its App Store practices. 

The regulatory body fined Google more than $5 billion in 2018 for abusing its Android market dominance, including by pre-installing apps. Google is challenging the fine.

And in the U.S., lawmakers in both chambers have introduced a narrow antitrust bill aimed at app store dominance.

The Open App Markets Act would block operators from requiring developers to use their in-app payment systems, prevent Apple and Google from penalizing companies that offer lower prices elsewhere and block the Silicon Valley giants from unreasonably placing their products at the top of app store searches.

The Coalition for App Fairness, a coalition of game and app developers formed in response to Apple and Google’s policies, praised South Korea’s bill as an example of how the rest of the world should tackle app store issues.

“South Korea’s new app store law is a significant development in the global fight to bring fairness to the digital economy,” Meghan DiMuzio, the group’s executive director, said. “The Coalition for App Fairness hopes U.S. and European lawmakers follow South Korea’s lead and continue their important work to level the playing field for all app developers and users.”

Updated at 11:43 a.m.