World Follows Korea in Limiting Big Tech's Hold on In-App Payments

  • By Nina Pasquini, Chosun Ilbo intern reporter

    July 21, 2022 12:57

    Korea became the first country in the world last year to pass a law that bans major app store operators Google and Apple from requiring developers to use their proprietary billing systems.

    By doing so, Google and Apple were able to charge them commissions as high as 30 percent. Now, countries from the U.S. to the EU are following suit, rolling out their own legislation that bans tech giants from monopolizing app payments.

    Lawmakers and experts gathered last week at the Asian Leadership Conference in Seoul hosted by the Chosun Ilbo discussed the implementation and pitfalls of such legislation.

    Marsha Blackburn, a Republican senator for the state of Tennessee, introduced bipartisan legislation last year to promote app store competition. "Tech companies' gatekeeping tendencies are a roadblock that closes off avenues of competition," she said at the conference. "Apple forces developers to use their expensive app store payment system, funneling profits away from developers."

    "I commend my friends in Korea for approving the first law in the world that opens app stores to other payment systems," she added. "Big tech's strategy won't be the status quo for much longer."

    Her bill has not yet passed.

    Korea's own implementation of the law has not been without problems. Earlier this month, Apple announced it will still charge a 26 percent commission on third-party payment systems in Korea.

    "There is room for improvement. The law has ample room for interpretation," said Koo Tae-eon at law firm LIN. "Big tech could argue, if they offer another choice of payment, they are in compliance; this is what Google is saying."

    There has also been confusion about exactly what regulatory body should enforce the law, the Korea Communications Commission or the Fair Trade Commission.

    "The KCC and FTC were competing about who is responsible for implementing the law when it was first amended," said Minjoo Party lawmaker Cho Seung-rae. "But now who is actually taking control? The KCC or the FTC? Regulatory agencies are not showing any intentions to restrict these companies, so we've been presenting these views to government agencies."

    People Power Party lawmaker Kim Yeung-shik also said the National Assembly must fix loopholes that allow Google and Apple to avoid following the law. "Google and Apple... need to conform to the law, and we need to think about how we can prevent monopoly around the world," he said.

    The European Union recently passed the Digital Markets Act, which forces Apple to allow developers to use third-party payment providers. Blackburn said the stakes for such tech antitrust legislation are higher than just commission fees.

    "Our tradition of maintaining healthy markets isn't the only thing at stake," she said. "This work will have ripple effects on efforts to preserve and promote human rights and democratic values around the world."

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