South Korea becomes the first nation to stop Google & Apple charging commissions on in-app purchases

South Korea’s parliament has approved a bill that bans major app-store operators such as Alphabet’s Google and Apple from forcing software developers to use their payment systems, marking the first such curb by a major economy.

The final vote was 180 in favor out of 188 attending to pass the amendment to the Telecommunications Business Act, dubbed the “Anti-Google law."

The approved amendment is aimed at stopping the technology majors from charging commissions of up to 30% on in-app purchases. The bill, which will come into force after being signed by President Moon Jae-in, also bans app-store operators with dominant market positions from “inappropriately” delaying the review of, or deleting of, mobile content from app markets. 

“It’s a model that keeps device costs low for consumers and enables both platforms and developers to succeed financially. And, just as it costs developers money to build an app, it costs us money to build and maintain an operating system and app store,” a Google spokesperson told Reuters, adding that Google Play provides far more than payment processing, and its service fee helps keep Android free.

In March, Google said it would cut Google Play Store fees from 30% to 15% for the first million dollars a developer makes on the platform per year. Apple said in November it will halve charges from 30% to 15% for software developers with less than $1 million in annual net sales on the App Store. 

“We believe 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 [$7.4 billion] to date with Apple,” Apple said, commenting on the latest move.

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