South Korea is introducing legislation that will ban Google and Apple from forcing app developers to pay commission fees for users’ in-app purchases.
The law, passed on Tuesday August 31, will force tech giants Google and Apple to offer third-party payment methods on their app stores, which will hopefully loosen the companies’ stranglehold on the app industry.
The lucrative mobile market
Apps hosted on their respective app stores have been forced to pay as much as 30% of all money made from in-app purchases. This issue came to a head last year when Fortnite developer Epic Games was kicked off the App stores for refusing to pay.
When taken into account that, for example, Apple’s App Store in 2020 grossed $64 billion (£55 billion), a cut of that adds up.
First South Korea, next the world
And the U.S. will soon be following suit. Bills introduced by the Senate and the House will outlaw Google and Apple from requiring commission fees.
Sen. Richard Blumenthal commented: “South Korea is taking steps to foster competition in the app economy. The U.S. can’t fall behind.”
The move is intended to allow app developers to give customers a means of paying that bypasses Google and Apple’s commission, creating a fairer environment for startup and small businesses.
Google and Apple have so far resisted the legislation in South Korea, arguing that customer’s privacy could be compromised by less secure payment methods, and have in the past lowered their commission rates to 15%.
