Google and Apple raised voice against new legislation passed by the South Korean parliament today (31 August), which will prevent app store providers from requiring developers to use their payment channels for purchases, warning of implications for users following implementation of the rules.
Apple told Mobile World Live (MWL) users who select alternative options to purchase digital goods and services would be placed at risk of fraud and damages to privacy protection.
The company also believes users would be robbed of a feature to manage their purchases while parental controls get weakened, leading to a decline in user trust and fewer opportunities for the more than 482,000 registered developers in South Korea “who have earned more than KRW8.55 trillion [$7.4 billion] to date with Apple”.
In a statement to MWL, Google defended the Google Play payment model, explaining the method was the ingredient for device costs to be low for consumers, while also allowing “platforms and developers to succeed financially”.
It did, however acknowledge it will reflect on ways to comply with the South Korean law, “while maintaining a model that supports a high-quality operating system and app store”.
The parliamentary vote makes South Korea the first country in the world to pass rules which force tech giants to let developers direct users to pay through alternative platforms, thus sidestepping up to 30 per cent commissions over app-related purchases.
South Korea’s goal is to promote fair competition, the parliament explained in notes related to the legislation.
The rules are yet to be approved by President Moon Jae-in, CNBC reported.
A similar attempt for lawfully requiring Google and Apple to open competition in the app distribution sphere was also recently made in the US.