It became known about the intention of the South Korean authorities to limit Apple and Google in matters of charging fees for purchases made in mobile applications. If the relevant decision comes into force, this case will be the first such restriction in the world practice, directly affecting the profits of technology giants.
Image: Dado Ruvic/Reuters
This week, members of the Parliamentary Committee on Legislation and the Judiciary are expected to approve an amendment to the Telecommunications Business Law, which has been unofficially called the «Law against Google.» The amendment prohibits app store operators that have a dominant market position from forcing the use of certain payment systems. That is, developers will not have to use payment instruments offered by companies, they will be able to choose their own, more profitable ones. If the amendment is approved by committee members, it could be finally approved this week.
The South Korean authorities began looking into issues related to the fee structure of the tech giants in the middle of last year. Apple and Google have faced criticism that the companies require developers to use only their own payment methods in their applications, charging a commission of 30% for completed transactions.
According to available data, the digital content store Google Play Market earned about $5.29 billion in South Korea in 2019. For Apple, the commission from in-app purchases in the App Store is also one of the key sources of income in the direction of the service business. This year, Google announced a 15% developer fee reduction for the first million annual revenues. Apple has made similar concessions in the past.