The South Korea National Assembly today passed the Business Telecommunications Act, requiring Apple and Google to allow developers to use their own in-app payment methods. As reported yesterday, the bill had a high likelihood of passing in the National Assembly and it means that developers will be able to process payments using methods other than Apple’s in-app purchase model. it is a significant shift for both Apple as well as Google.
The Wall Street Journal reported that the passing of the bill is the first of its kind in the world and will likely have an impact on Apple and Google globally as other countries consider similar legislation.
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.Wall Street Journal
Interestingly, the Business Telecommunications Act in South Korea also has provisions in it to prevent “unreasonable delay” in approbate apps or deleting them from the App Store or Play Store to prevent retaliation. If Apple or Google fail to comply with these laws, the fines are hefty at 3% of the company’s total revenue in the country. The law also means that it could impact the two tech giants financially with less commission from in-app purchases.