App Store thirdparty payment plans must be revealed next month, says Korea

A new antitrust law in South Korea will force both Apple and Google to support app store third-party payment options – and the two companies have now been given to the middle of the month to explain their plans to comply.

This could have wide-ranging implications, as similar pressures are being applied in other countries, and Apple is likely to want to adopt a consistent approach around the globe. Whatever the company proposes in October could reveal its third-party payment plans worldwide …

Background

We’ve previously outlined the background to this.

Apple’s monopoly on the sale of iOS apps and in-app purchases is the biggest antitrust concern about the tech giant. While Apple claims that the relevant market definition is “smartphone apps,” in which it does not have a monopoly, many regulators and legislators around the world view the market definition as “iOS apps,” in which it does.

This is because it is not realistic for most developers to launch an Android app but not an iOS one. An iOS app is essential to reach a large slice of the population.

Many developers would like the option to bypass Apple as a payment platform, and an increasing number of governments seem sympathetic to this.

Apple’s view remains that it created the market for iOS apps, and is entitled to be rewarded for this, and for the opportunity it offers to developers. The company did make a massive U-turn when it cut its commission from 30% to 15% for the vast majority of developers, but has so far stuck to its guns when it comes to its anti-steering policy, offering only a tiny concession to settle a recent lawsuit.

South Korea has now told both Apple and Google that they must allow developers to use third-party payment platforms in order to comply with a new antitrust law.

Deadline for App Store third-party payment plans

Reuters reports that South Korea is granting the two companies only a very short time to formulate their plans – then several months to implement them.

Apple and Google have been asked to turn in by mid-October compliance plans for a new South Korean law that bans major app store operators from forcing software developers to use their payment systems, a regulatory official said on Wednesday.

The Korea Communications Commission will soon be drawing up an enforcement ordinance that will accompany the amendment of the country’s Telecommunications Business Act. Most of the new law went into effect in mid-September.

The enforcement ordinance is expected to be drafted within six months or possibly earlier, the official said.

Apple had offered no comment at the time of writing.

Photo: Andy Makely/Unsplash

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