There is a lot of attention on how Google and Apple handle their respective digital storefronts. Some of that attention is all about making changes — especially when it comes to Apple’s App Store. And it looks like one bill from a major economy could set the stage for future change across the board. Which Apple is obviously not too pleased with.
As reported today by Reuters, a bill in South Korea appears close to being approved by the government, and, if that does happen, it would ban companies like Google and Apple from requiring developers use their own payment systems. If this becomes law, then it would also mean that Apple and Google would not be able to change commissions on in-app purchases — effectively making a huge change to how these companies function. If this goes through, it would mark the first major economy to force a change like this.
Interestingly, the law is called the “Anti-Google Law” in short-hand, while it’s more official name is the Telecommunications Business Act. It’s meant to primarily focus on digital marketplaces that are owned by companies with dominant market positions. So, in this case, Apple and Google. It’s set to get approval today, August 24, with a final vote set for Wednesday, August 25.
From today’s report:
If the bill gets the committee’s approval, it will be put to a final vote on Wednesday. Lawmakers in South Korea have pushed the issue of the commission structure since mid-2020.
Apple had a comment ready to go, saying that this change put forth by the South Korean government would put users in danger of, “fraud, undermine their privacy protections, make it difficult to manage their purchases.” The company goes on, saying, “user trust in App Store purchases will decrease as a result of this proposal — leading to fewer opportunities for the over 482,000 registered developers in Korea who have earned more than KRW8.55 trillion to date with Apple.” So, while Apple’s initial argument is one it has used in the past, leaning heavily into the safety and privacy and security of iOS users, it also adds that developers will see less interest from App Store users in general. Which means less money for them, too.
It appears South Korea may be the first to make a change like this, which could impact Apple’s business in huge ways moving forward. However, it’s not the only region to do this. In the United States, the Senate is looking to make similar changes. And the European Union is also moving in similar directions. Put shortly, things may look very different for Apple –and Google– in the relatively near future.