Apple has finally caved to Korea’s telecommunication regulator and agreed to allow third-party in-app billing systems in South Korea thus complying with a local law.
The iGiant told The Register:
A partial amendment to South Korea’s Telecommunications Business Act that passed in September 2021 prevented tech giants with dominant market positions from forcing their own payment options.
The companies most affected by this law were Google and Apple. Google bit the bullet and complied in November. Meanwhile, Apple tried to argue it was already compliant, a strategy that didn’t work as well as the company hoped.
In response, KCC started issuing fines up to 2 per cent of revenue to companies that still forced their proprietary in-app payment systems.
Korean news agency Yonhap reported that Apple’s compliance plans include a reduced service charge for alternative payment systems. The current charge stands at 30 per cent.
No details of when the change will occur were given.
In the rest of the world, both Apple and Google’s revenue levy cannot be avoided by developers, with the larger devs typically having to hand over as much as a 30 per cent cut of app and in-app purchases made through the official stores.
The fact that app makers are not allowed to use third-party payments systems if they want to sell in Apple and Google’s shops is being contested by competition watchdogs both in the UK and the US – where both federal and state regulators are scrutinising Apple’s grip on the App Store.
KCC also released a document last week regarding improved mobile app subscription service termination processes, saying the government had recommended that mobile apps that provide major subscription services, and specifically Apple, include in-app termination capabilities.
“In consideration of the results of this inspection, KCC is currently pursuing an amendment to the Telecommunications Business Act (‘21.9.14) related to in-app payments, and will include mandatory user protection regulations, such as a ban on cancellations for in-app payments by app market operators,” said KCC. ®