South Korea Passes 'Anti-Google Law' to Regulate App Store Fees

South Korea Passes Landmark “Anti-Google” Law

Following multiple postponements, South Korea’s National Assembly has officially approved legislation commonly referred to as the “Anti-Google law.” While the moniker references the prominent search engine, the law’s scope extends beyond a single company.

This new regulation is designed to prevent both Google and Apple from mandating the use of their proprietary in-app billing systems for applications distributed through their dominant app stores.

A Global First

This marks the inaugural instance worldwide of a governmental body enacting measures to curtail Google and Apple’s ability to enforce their payment infrastructures on in-app transactions.

Increased scrutiny has been directed towards the restrictive elements of Google and Apple’s systems in various international markets. Consequently, observers are now anticipating whether South Korea’s action will serve as a catalyst for similar regulatory interventions in other nations.

Further Regulatory Considerations

Australia’s Competition and Consumer Commission (ACCC) is currently evaluating potential regulations concerning the digital payment systems of Apple, Google, and WeChat, as reported by multiple media outlets.

Legislative Background

On August 25th, South Korea’s preliminary committee advanced the revised Telecommunication Business Act. This revision specifically aims to limit Google and Apple’s practice of levying commissions on in-app purchases made by developers.

Efforts to address this issue began in August 2020, when South Korean legislators initiated proposals to prohibit these tech giants from exploiting their market dominance within the app payment sector.

Previous Responses from Tech Companies

In March 2021, Google responded by reducing its commission on in-app purchases from 30% to 15% in an attempt to appease developers. However, the company subsequently announced a delay in implementing its updated in-app billing system until March 2022.

Apple, in August, proposed a settlement in a U.S. lawsuit brought by software developers. The proposed settlement would allow developers to offer payment options outside of the iOS app or the App Store.

However, Apple’s proposal did not extend to permitting developers to integrate alternative payment methods directly within their applications.

Apple’s Concerns

According to Apple’s official statement, the proposed Telecommunications Business Act could potentially expose users to increased risks of fraud and compromise their privacy. Furthermore, managing purchases could become more complex, and features like ‘Ask to Buy’ and Parental Controls may be diminished in effectiveness.

Google did not provide a comment at the time of this report.