South Korea’s Telecommunications Business Act will end Apple’s App Store payment monopoly

August

30

The home of Samsung may be the one who topples the first domino to end Apple’s App Store payment monopoly.

The company is widely expected to pass their new Telecommunications Business Act that would force app stores, including Apple and Google, to give users a free choice from payment providers in an app, allowing developers to bypass the 30% processing fee Apple and Google normally charges.

It has recently been revealed that Google generated $11.2 billion in revenue and $8.5 billion in gross profit through the Play Store in the year 2019 from app sales, in-app purchases and revenue generated through ads on the Play Store. Apple likely generates much, much more.

It has also been revealed that Google has actively resisted making 3rd party app stores a real choice for consumers, paying OEMs to ship devices without 3rd party stores and paying developers to keep their apps exclusive to the Google Play Store. Apple of course simply completely forbids 3rd party stores.

“This could presage similar actions elsewhere,” said Omdia analyst Guillermo Escofet, who specializes in digital consumer platforms. “Regulators, lawmakers and litigators in North America and Europe are also scrutinizing app-store billing rules, and the overriding political mood has become hostile to the enormous amount of power concentrated in the hands of the tech giants.”

The Biden administration has attempted to intervene on behalf of Apple.

“We are engaging a range of stakeholders to gather facts as legislation is considered in Korea, recognising the need to distinguish between discrimination against American companies and promoting competition,” US Trade Representative spokesman Adam Hodge said in a statement to the New York Times.

The implementation may therefore in the end be watered down.

“Adjustments can be made in executing the policy,” Korea Communications Commission Chairman Han Sang-hyuk told reporters Thursday. “We are fully aware of the concerns of Apple and Google, so we will implement them in consideration of both industry stakeholders and users.”

That vote could take place as soon as this week and if passed it will become law with a signature from President Moon Jae-in.

via Bloomberg

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