South Korea’s parliament has approved on the 31st of August 2021 a bill that prohibits Apple and Google from forcing app developers to only use their proprietary billing systems. The bill is an amendment to South Korea’s Telecommunications Business Act.
This decision will allow app developers to avoid paying 15 to 30% commission on every transaction to Apple and Google. Developers will be able to suggest to end users the use of alternative payment platforms. It will also prevent the tech giants from unreasonably delaying reviewing apps or deleting them.
The sanctions of not complying with the bill are fines up to 3% of Apple and Google’s South Korea revenue.
The decision of the South Korean parliament could be the first of many similar decisions worldwide, as this topic is at the centre of many complaints, including cases brought by Epic Games in the US and Australia, and in the Spotify complaint to the EU that has resulted in a European Commission investigation.
In parallel, Russia’s competition authority informed Apple that it should remove the restrictions on app developers’ ability to inform end users of subscriptions outside the Apple App Store, thus enabling them to avoid paying a commission to Apple. According to MLex, Apple’s actions are restrictive of developers’ independent behaviour, which further negatively impacts competition and end consumers, which have access to increased prices in developers’ products.
Please contact Tim Cowen if you have any questions regarding the above.