South Korean regulator worried Apple, Google, may be working around app store payment choice law
(2022/08/10)
- Reference: 1660112711
- News link: https://www.theregister.co.uk/2022/08/10/apple_google_south_korea_investigation/
- Source link:
South Korea's Communications Commission (KCC) said on Tuesday it is investigating Google, Apple and domestic app store operator One Store Co. over sneaky ways the companies may be dodging the country's in-app payment laws.
The regulator's [1]announcement of the probe follows provisional inspections of all three stores since May 17 regarding violations of the [2]Telecomunications Business Act [PDF] – a law that promotes public interest in telecom-related matters.
Among many things, the Act prevents tech giants with dominant market positions making their own payment method the only one available on an app store. South Korea was the first nation to mandate app store payment choice with an [3]August 2021 amendment designed to target the likes of Google and Apple.
[4]
Google [5]agreed to comply in early October 2021, while Apple dragged its feet, claiming it already did comply, until persistence from the KCC and fines of up to two percent of subsequent revenue [6]convinced it otherwise in January this year.
[7]
[8]
South Korea remains the only country to have such a law. Outside of the Southeast Asian country, developers hand over up to 30 percent of their revenue from app and in-app purchases made through the official stores.
[9]Korea gives Google and Apple another kick for requiring their own payment systems
[10]A slice is better than none: Apple gives in, allows third-party app billing systems in Korea, per local law
[11]Samsung adds 'repair mode' that hides data on Galaxy smartphones in South Korea
But KCC fears that while Apple and Google appear to be complying with the law, they are finding ways to coerce developers into using their native payment systems – or punishing those that don't.
"If Google and Apple impose discriminatory conditions on the payment method (third-party payment) provided by the app developer or makes the use procedure inconvenient, it may constitute an act of forcing a specific payment method," KCC's announcement states (after machine translation).
The watchdog org added that it understood there are problems in the giants' app review processes, such as Apple not notifying developers of review periods or reasons for delays.
[12]
KCC said it plans to clarify whether such an act constitutes indirectly "forcing" a specific payment method. If the regulator finds companies in violation of laws, there will be "strict measures such as correction order or fines."
The addition of One Store to the group of companies receiving KCC scrutiny is notable, as the company belongs to SK Group – the second largest South Korean conglomerate after Samsung. In April, One Store [13]announced that it would expand globally into both Asian and European markets. ®
Get our [14]Tech Resources
[1] https://kcc.go.kr/user.do?boardId=1113&page=A05030000&dc=K00000200&boardSeq=53593&mode=view
[2] https://eng.kcc.go.kr/download.do?fileNm=TELECOMMUNICATIONS_BUSINESS_ACT.pdf
[3] https://www.theregister.com/2021/09/01/south_korea_anti_google_bill_passed/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YvOBxxwovgk2@iAY8@D-wgAAAIY&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://www.theregister.com/2021/10/06/google_to_comply_with_south_korean_payment_law/
[6] https://www.theregister.com/2022/01/12/apple_third_party_payments/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YvOBxxwovgk2@iAY8@D-wgAAAIY&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YvOBxxwovgk2@iAY8@D-wgAAAIY&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2021/11/18/south_korea_app_store_fines/
[10] https://www.theregister.com/2022/01/12/apple_third_party_payments/
[11] https://www.theregister.com/2022/08/01/samsung_galaxy_smartphone_repair_mode/
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YvOBxxwovgk2@iAY8@D-wgAAAIY&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[13] https://www.prnewswire.com/news-releases/korean-app-market-one-store-announces-its-entry-into-the-global-market-this-year-301526505.html
[14] https://whitepapers.theregister.com/
The regulator's [1]announcement of the probe follows provisional inspections of all three stores since May 17 regarding violations of the [2]Telecomunications Business Act [PDF] – a law that promotes public interest in telecom-related matters.
Among many things, the Act prevents tech giants with dominant market positions making their own payment method the only one available on an app store. South Korea was the first nation to mandate app store payment choice with an [3]August 2021 amendment designed to target the likes of Google and Apple.
[4]
Google [5]agreed to comply in early October 2021, while Apple dragged its feet, claiming it already did comply, until persistence from the KCC and fines of up to two percent of subsequent revenue [6]convinced it otherwise in January this year.
[7]
[8]
South Korea remains the only country to have such a law. Outside of the Southeast Asian country, developers hand over up to 30 percent of their revenue from app and in-app purchases made through the official stores.
[9]Korea gives Google and Apple another kick for requiring their own payment systems
[10]A slice is better than none: Apple gives in, allows third-party app billing systems in Korea, per local law
[11]Samsung adds 'repair mode' that hides data on Galaxy smartphones in South Korea
But KCC fears that while Apple and Google appear to be complying with the law, they are finding ways to coerce developers into using their native payment systems – or punishing those that don't.
"If Google and Apple impose discriminatory conditions on the payment method (third-party payment) provided by the app developer or makes the use procedure inconvenient, it may constitute an act of forcing a specific payment method," KCC's announcement states (after machine translation).
The watchdog org added that it understood there are problems in the giants' app review processes, such as Apple not notifying developers of review periods or reasons for delays.
[12]
KCC said it plans to clarify whether such an act constitutes indirectly "forcing" a specific payment method. If the regulator finds companies in violation of laws, there will be "strict measures such as correction order or fines."
The addition of One Store to the group of companies receiving KCC scrutiny is notable, as the company belongs to SK Group – the second largest South Korean conglomerate after Samsung. In April, One Store [13]announced that it would expand globally into both Asian and European markets. ®
Get our [14]Tech Resources
[1] https://kcc.go.kr/user.do?boardId=1113&page=A05030000&dc=K00000200&boardSeq=53593&mode=view
[2] https://eng.kcc.go.kr/download.do?fileNm=TELECOMMUNICATIONS_BUSINESS_ACT.pdf
[3] https://www.theregister.com/2021/09/01/south_korea_anti_google_bill_passed/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YvOBxxwovgk2@iAY8@D-wgAAAIY&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://www.theregister.com/2021/10/06/google_to_comply_with_south_korean_payment_law/
[6] https://www.theregister.com/2022/01/12/apple_third_party_payments/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YvOBxxwovgk2@iAY8@D-wgAAAIY&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YvOBxxwovgk2@iAY8@D-wgAAAIY&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2021/11/18/south_korea_app_store_fines/
[10] https://www.theregister.com/2022/01/12/apple_third_party_payments/
[11] https://www.theregister.com/2022/08/01/samsung_galaxy_smartphone_repair_mode/
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YvOBxxwovgk2@iAY8@D-wgAAAIY&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[13] https://www.prnewswire.com/news-releases/korean-app-market-one-store-announces-its-entry-into-the-global-market-this-year-301526505.html
[14] https://whitepapers.theregister.com/
Warm Braw
There may not be specific laws, but the Competition and Markets Authority in the UK (for example) has fairly wide-ranging powers without them.
The problem (as in SK) would seem to be that companies with deep pockets could draw out the process of investigation and compliance with proposed remedies almost indefinitely.
Competition is the basis of capitalism
xylifyx
If Apple and Google cannot compete with third party payment systems it is their fault. We need a free market, not a monopoly tax. It is up to third party payment systems to be smooth though so it will not be a hassle to use.
Re: Competition is the basis of capitalism
Brewster's Angle Grinder
" It is up to third party payment systems to be smooth though so it will not be a hassle to use."
And that's the rub. Do you know how many road blocks Gapple can throw up that prevent that being the case? Their own payment systems have privileged access to the system and can do things a third party system can't hope to compete with.
These really need to be system components that are installed with elevated privileges by the OS and made available to client apps that request them.
South Korea remains the only country to have such a law.
Such a law is of public interest.
The fact only South Korea has such a law demonstrates the power of MegaTechCorps to corrupt our dear lawmakers worldwide.