Cayman Islands, Caribbeanand International News
Sunday, Oct 01, 2023

Google, Apple hit by first law threatening dominance over app-store payments

Google, Apple hit by first law threatening dominance over app-store payments

South Korea will require the companies to allow competing payment systems, threatening their 30% cut of most in-app digital sales
Google and Apple Inc. will have to open their app stores to alternative payment systems in South Korea, threatening their lucrative commissions on digital sales.

A bill passed Tuesday by South Korea's National Assembly is the first in the world to dent the tech giants' dominance over how apps on their platforms sell their digital goods. It will become law once signed by President Moon Jae-in, whose party strongly endorsed the legislation.

The law amends South Korea's Telecommunications Business Act to prevent large app-market operators from requiring the use of their in-app purchasing systems. It also bans operators from unreasonably delaying the approval of apps or deleting them from the marketplace -- provisions meant to head off retaliation against app makers.

Companies that fail to comply could be fined up to 3% of their South Korea revenue by the Korea Communications Commission, the country's media regulator.

The law will be referenced by regulators in other places -- such as the European Union and the U.S. -- that also are scrutinizing global tech companies, said Yoo Byung-joon, a professor of business at Seoul National University who researches digital commerce.

"Korea's decision reflects a broader trend to step up regulation of technology-platform businesses, which have been criticized for having too much power," Mr. Yoo said.

After a committee decision in late August that pushed the bill to a final vote at the National Assembly, Apple said it was concerned that users who purchase digital goods through other payment systems will be at greater risk of fraud and privacy violations.

At Alphabet Inc. unit Google, Wilson White, senior director of public policy, said "the rushed process hasn't allowed for enough analysis of the negative impact of this legislation on Korean consumers and app developers."

The bill -- which in Korean has been nicknamed the "Google power-abuse-prevention law" by some lawmakers and media -- was welcomed by groups representing South Korea's internet-technology companies and startups, as well as local content developers and app makers.

"This is a significant step forward for the creation of a fairer app ecosystem," said Kwon Se-hwa, general manager at the Korea Internet Corporations Association.

Google's Play store accounted for 75% of mobile-app downloads globally in the second quarter. Apple accounted for 65% of app-store consumer spending on in-app purchases and subscriptions during the same quarter, according to App Annie, a mobile-app analytics firm.

The companies don't break out their own app-store revenue in South Korea, but it is likely a small fraction of the total. Globally, services including the app store generated $53.8 billion of Apple's $274.5 billion in revenue in its last fiscal year. Google parent Alphabet reported $182.5 billion in revenue last year, of which "Google other" revenue including Google Play store sales accounted for $21.7 billion.

Apple and Google face lawsuits and regulatory probes in multiple countries around their requirements that apps listed on their app marketplaces use in-house payment systems that take cuts of up to 30% of in-app sales in most cases.

The European Union in December proposed the Digital Markets Act, meant to prevent large technology platforms from abusing their gatekeeper position.

Attorneys general from 36 U.S. states and the District of Columbia have filed an antitrust lawsuit against Google alleging its Google Play app store is an illegal monopoly.

And a bipartisan bill recently introduced in the U.S. Senate would restrict how the Apple and Google app stores operate and what rules can be imposed on app developers.

"Fortnite" maker Epic Games Inc. publicly challenged Google and Apple last year by adding a payment system inside the game that prevented the companies from collecting their typical 30% cut. After Google and Apple suspended the combat game from their stores, Epic sued them. Apple and Epic are awaiting a verdict in their suit.

Apple and Google have made some concessions. Last year, Apple reduced the commission it charges on in-app sales to 15% for small developers that generate no more than $1 million in revenue through its app store. Google followed suit this year by reducing its cut to 15% on the first $1 million developers earn from its app store.

In late August, as part of a proposed settlement of a 2019 federal lawsuit, Apple said it would allow developers to use information captured from apps -- such as email addresses -- to tell customers about alternatives to Apple's payment system. But developers wouldn't be able to promote payment systems inside the apps.

The Coalition for App Fairness dismissed the change, saying it doesn't fundamentally address the "structural, foundational problems facing all developers."

South Korean lawmakers set their legislation in motion last year after Google announced all apps would have to use the company's proprietary payment system, expanding a requirement that previously applied to game apps. That drew strong protest from local app makers and content developers.

Related Articles

Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Israel: Unprecedented Civil Disobedience Looms as IDF Reservists Protest Judiciary Reform
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
Europe is boiling: Extreme Weather Conditions Prevail Across the Continent
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Italian Court's Controversial Ruling on Sexual Harassment Ignites Uproar
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
BBC Personalities Rebuke Accusations Amidst Scandal Involving Teen Exploitation
A Swift Disappointment: Why Is Taylor Swift Bypassing Canada on Her Global Tour?
Historic Moment: Edgars Rinkevics, EU's First Openly Gay Head of State, Takes Office as Latvia's President
Bye bye democracy, human rights, freedom: French Cops Can Now Secretly Activate Phone Cameras, Microphones And GPS To Spy On Citizens
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
Unilever Plummets in a $2.5 Billion Free Fall, to begin with: A Reckoning for Misuse of Corporate Power Against National Interest
Beyond the Blame Game: The Need for Nuanced Perspectives on America's Complex Reality
Twitter Targets Meta: A Tangle of Trade Secrets and Copycat Culture
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
The New French Revolution
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner