South Korea's on Tuesday became the first country to legally ban the monopolies that Apple and Google hold over-payments on in-app purchases. The landmark decision made by the South Korean government will create a lot of impact for the tech giants like Apple and Google.
The act's name is Telecommunications Business Act, nicknamed 'Anti Google Law'; this law will force developers to use their billing systems for in-app purchases. The final vote held in the South Korean National Assembly was 180 in favour out of 188 attending to pass the amendments, Reuters reported.
Apple says this law will affect their business; their App Store purchases will decrease were, on the other hand, Google says, its current working model keeps device cost low for consumers by keeping android free of cost.
How Will It Impact Tech Giants?
The app ecosystem is considered the most booming one, which helps in revenue generation the most. In Google/Android phones, we use the Play Store, and in Apple, we have the App Store. These two platforms, which run the most prominent app stores, mandate that all in-app payments must go through their processing system, on which they charge commissions of 15% and 30%, reported The Indian Express.
In some jurisdictions, their administrations have taken it upon themselves to look into these kinds of practices. Still, in some cases, the application developers have been vocal against these companies. For example, there is a lawsuit against Apple by the US where the company has done settlement. On Wednesday, Apple announced that it was rolling out even more tweaks to the App store to close an investigation by the Japan Fair Trade Commission (JFTC).
Last year, Epic Games, developers of the popular video game Fortnite, intentionally broke Apple's rules and established its own payment processing system.
Even in the European Union, Swedish music company filed a complaint against Apple for imposing unfair policies and in addition to this European Parliament also introduces the Digital Marketing Act, which says it can attract tech giants for massive fines for offensives like giving priority to their services and products first ignoring the efforts of the smaller companies.
In- App Purchases From Google
Earlier Google said it would reduce its services fee for Play Store. For instance, a gaming app that offers items for in-app purchases will have to pay 15% revenue to Google for the first $1 million it makes, and developers who make more than this needs to pay up to 30%.
Indian developers also share their criticism when it announced that it would charge a developer a 30 per cent fee from the play store for any kind of digital goods. Paytm CEO Vijay Shekhar Sharma has repeatedly termed this fee as a tax and cited the need for developers in India to have their own app store.
The Alliance of Digital India Foundation ( ADIF) also raised the issue with both tech giants commissions on app payments and has welcomed South Korea's Decision very strongly. Mails sent to Apple and the Competition Commission of India did not elicit any response.