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Monday, December 11, 2023

South Korea is taking action against the dominance of Google and Apple in the app market

South Korea’s parliament has passed a law to restrict the market power of large tech companies like Apple and Google.

The law is intended to prevent the operators of app marketplaces from imposing their payment systems for in-app purchases on software developers. It also forbids them to postpone the approval of apps or to delete them on their digital distribution platforms without a valid reason. The relevant amendment to the Telecommunications Business Law was passed by the National Assembly in Seoul on Tuesday.

The amendment has yet to be signed by President Moon Jae In. South Korea would be the first country to introduce such legal restrictions on tech companies‘ in-app sales policies. Observers assume that the procedure could serve as a model for similar legislative initiatives in other countries.

Apple and Google had fought the proposed law in South Korea for months because they believed it would jeopardize their lucrative app business. According to the “New York Times”, the companies had turned directly to MPs and government officials to prevent the decision. The law therefore forces app store operators to let users choose which payment system they choose to make in-app purchases. In addition, they can no longer prevent developers from offering their products on other app marketplaces.

Similar to the case of the EU’s plans for new rules in the digital business, Apple had criticized that the law in South Korea could undermine the measures to protect users. Like the EU Commission, which presented its digital package in December, South Korea wants to enable more competition through the law. Apple last published a paper on the dangers of other app sources in June.

South Korea is the first large country to set such requirements – although there is worldwide criticism that the two dominant operating system providers charge fees of up to 30 percent of the turnover generated by app developers. Because of this, among other things, the Cartel Office in Germany is now watching Apple . And in the US there is a lawsuit between Apple and the “Fortnite” maker Epic Games because of the app fees. Both US companies recently announced changes.


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