Apple Inc and the alphabet Google are not doing enough to comply with a South Korean law that prohibits app store operators to force app developers to use their payment systems, a lawmaker behind the amendment told Reuters.
South Korea, the first country to impose legislation limiting payment policies for tech companies, is expected to release initial details of what it takes to comply with the law on Wednesday, an official from the Korea Communications Commission (KCC) said. .
It amended the Telecommunication Business Act in August in an attempt to curb the market dominance of tech majors and prevent large app store operators from charging commissions on in-app purchases.
The law went into effect in September, but details of what would constitute compliance are being drafted by the KCC in an enforcement order.
Apple had told the South Korean government that it was already in compliance and did not need to change its nL4N2RB0QK app store policy. Google has announced plans to allow third-party payment systems nL1N2RV03J in South Korea, but will only reduce its developer service charge by 4 percentage points when users choose an alternative billing system.
Tech companies charge developers up to 30% of their sales in in-app transactions.
“Frankly, we’re not happy … Apple’s claim that it’s already complying is absurd,” said lawmaker Jo Seoung-lae, who led the amendment.
“Excessive fees rob developers of their opportunities for innovation (…) parliament needs to be closely briefed while the government drafts detailed regulations to ensure there is accountability,” Jo said.
Apple and Google did not immediately respond to requests for comment.
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“It is the first legislation in the world with the possibility of transforming the market of a duopoly with Apple and Google”, Tim Sweeney, CEO of the creator of “Fortnite”. Epic games and an Apple voice critic told Reuters.
Last year, “Fortnite” launched in Apple and Google app stores after Epic introduced a new payment system.
But even if Apple takes a similar stance to Google in charging fees while allowing outside payments, Epic Games would not accept the position because Apple and Google charge fees or impose control over competing payment services. ruins the point of competition, ”he added.
The KCC is drafting “finely woven” regulatory details for the ordinance which will be reported to a parliamentary committee on Wednesday and put into practice by March of next year, the KCC vice president said on Tuesday, Kim Hyun, at an App Ecosystem Fairness Conference.
However, it is not clear what the penalties will be if the rules are broken.
A first version of the enforcement order seen by Reuters details a fine of up to “2% of income” as a sanction for a breach of the law by operators of the application market.
“We have seen in other jurisdictions that these monetary penalties do not deter companies like Apple and Google because for them it is a drop in the bucket,” said Meghan DiMuzio, executive director of the Coalition advisory group. for App Fairness.