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| South Korea wants to end the dominance of Apple and Google |
South Korea is set to pass a game-changing law that could force Apple and Google to relinquish control of commissions collected by developers.
While there's been a lot of talk about the two companies having too much control over inline purchase fees on their app stores, this is the first time any country has taken decisive action to reduce them.
According to Reuters, a parliamentary committee has passed a bill that would prevent Apple and Google from forcing app developers to use payment systems on these platforms, thus removing the last hurdle before the final vote.
The Congressional Legislative and Judicial Committee has agreed to review the Communications Commerce Act, which aims to prevent app market operators from improperly using their websites in order to force developers to use certain payment systems.
If the bill is passed at the National Assembly meeting on August 30, South Korea would be the first country to impose such accounting restrictions through the applications of global tech giants that are increasingly subject to global restrictions.
Apple and Google charge app developers 30% of in-app purchases. However, over the past year, they have cut their cost of revenue from less than $1 million to 15%.
South Korea wants to end the dominance of Apple and Google
The so-called anti-Google law was introduced to Parliament in August 2020. That was a month after the US search giant announced that all apps must use its accounting system. They charge 30% commission on all in-app purchases.
Both companies believe that in-app purchases provide a robust and secure framework for developers to make money and prevent fraud.
In response to the revised new rules for South Korea. Apple said the move could be dangerous for users in terms of privacy.
Google said, "The Fast Track Program cannot fully analyze the negative impact of this legislation on Korean consumers and app developers."
"This move puts users who purchase digital goods from other sources at risk of fraud," Apple added. This undermines your privacy and makes it difficult to manage your purchases. This reduces the options for Korean developers.
The company said it has more than 482,000 developers in South Korea and has generated $7.3 billion in revenue so far.
In contrast, sales on the Google Play Store soared, with the Korea Times reporting that figure was $4.3 billion last year.
Last year, Google Play Store sales in South Korea were estimated at $4.3 billion. According to the Korea Mobile Business Association, this compares to the $1.3 billion Apple App Store.
A bill has been introduced in the US to limit the dominance of Apple and Google in the in-app payment system.