South Korea passes bill to curb Google, Apple's in-app fee monopolies

The South Korean parliament on Tuesday passed a bill that would rein in the dominance Google and Apple exert over payments on their respective app stores. It became the first nation in the world to enact such a law.

The South Korean lawmakers voted to approve the amendments to the Telecommunications Business Act, which bars app market operators from forcing certain payment systems on mobile content businesses by abusing their market positions, reports news agency Yonhap.

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The move comes amid growing global scrutiny of Google and Apple, who maintain a strong grip over mobile ecosystems, for requiring developers on their app stores to use their proprietary payment systems that charge fees of up to 30 per cent when users purchase digital goods within apps.

Developers around the world have questioned app market operators' exclusive in-app payment systems, opposing their relatively high commissions and demanding that they should be able to freely use other systems, the report said.

The latest legislation in South Korea is expected to give app developers the choice to use other payment systems, potentially signalling a major shift in how Google and Apple run their app markets, it added.

The legislative movement in South Korea picked up after Google announced in September last year it would enforce its billing system on all developers on its Play Store starting October this year.

Local tech groups vehemently opposed the move, calling it a monopolistic measure and saying it would likely lead to a price hike in the broader digital content industry, the report said.

But the legislative movement initially faced fierce controversy amid concerns over a potential trade conflict with the US as it essentially took aim at the US companies, it added.

The report mentioned that South Korean app developers have high hopes for the revised legislation to resolve their long-held complaints against the commissions charged by app store operators.

However, Apple and Google have expressed concerns about the revisions, arguing that allowing other payment systems could lead to security and privacy risks for users.