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South Korea passes bill to ban payment dominance by Apple, Google

PUBLISHED ON 2021-08-31 23:30:00 EST Ishika Dangayach

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South Korea's parliament has adopted legislation that would make it the first country to put restrictions on Google and Apple's payment practices, which require developers to utilize the tech giants' proprietary billing systems.

Apple and Google's policies often compel developers to pay the tech behemoths a fee of up to 30% on each transaction.

The legislation, which was adopted on Tuesday, implies that developers will be able to avoid paying commissions to big app store operators such as Google and Apple by sending customers to other payment channels.

This attempt to disrupt the big tech hegemony over how developers sell digital products within their applications on their marketplaces. The measure is the world's first of its type, amending South Korea's Telecommunications Business Act to prohibit big app market operators from mandating the usage of their in-app purchase systems.

According to Yonhap News, the bill, known colloquially as the Anti-Google Law was introduced in parliament in August.

It is intended to prevent app store owners in strong positions from imposing payment schemes on app creators and “inappropriately” delaying app evaluations or blocking apps, Reuters reported

The bill also empowers the South Korean government to resolve disputes over payment, cancellations, and refunds in the app market, according to reports.

If Apple and Google fail to comply with this regulation, the South Korean Communications Commission, the country's media regulator, would penalize them 3% of their total revenue in South Korea.

According to Reuters, 180 of the legislators in attendance voted in support of approving the modification to the Telecommunications Business Act.

The National Assembly's legislative and justice committees approved amendments to a law aimed at prohibiting app store owners from compelling developers to adopt certain payment methods, according to media reports last week.

The South Korean legislation is a result of Google's statement last year that it will begin enforcing the charging system on all developers on the Play Store in October of this year.

Apple agreed on Thursday to relax App Store rules for small developers, letting them other promote payment methods  than Apple's payment system.

Earlier this month, A new bipartisan bill was introduced to bring more competition to the smartphone app store market currently dominated by Apple and  Google and said the duo has too much market control.

With inputs from CNBC 

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