S.Korea lawmaker says Apple, Google not doing enough to comply with app store law

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Seoul, Nov 16 (Businesshala) – Apple Inc. (AAPL.O) and Alphabet (GOOGL.O) Google aren’t doing enough to comply with South Korea’s law that mandates major app store operators to allow app developers to use only their proprietary software. Blocks the payment system from being used, a lawmaker leading the amendment told Businesshala.

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South Korea, the first country to crack down on tech companies’ payment policies, is expected to make public preliminary details on Wednesday to comply with the law, a Korea Communications Commission (KCC) official said.

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South Korea amended the Telecommunications Trade Act in August to try to curb tech companies’ market dominance and prevent large app store operators from charging commissions on in-app purchases.

The law came into force in September, but details of what will be complied with in an enforcement ordinance are being worked out by the KCC.

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Apple told the South Korean government that it is already compliant and does not need to change its App Store policy, while Google said it plans to allow third-party payment systems in South Korea. but will reduce its service fee charges for developers only by 4 percentage points when users choose an alternative billing system.

Tech companies charge developers up to 30% of their sales in in-app transactions.

“Frankly, we are not satisfied,” said lawmaker Joe Seung-la, who spearheaded the amendment.

“Excessive fees take away developers’ innovation opportunities … Parliament should be closely informed as the government drafts detailed rules to ensure there is accountability,” Joe said.

Apple and Google did not immediately respond to requests for comment.

KCC is preparing “finely woven” regulatory details for the ordinance that will be reported to a parliamentary committee on Wednesday and implemented by March next year, KCC vice president Kim Hyun told a conference on app ecosystem fairness on Tuesday .

Epic Games CEO Tim Sweeney told Businesshala: “This is the first law in the world to replace the market with a monopoly with Apple and Google.”

However, it is not clear how compliance will be enforced nor what penalties will be imposed for violating the rules.

An early draft of the enforcement ordinance, seen by Businesshala, stipulates fines of “up to 2% of revenue” as penalties for violations of the law by app market operators.

Reporting by Joyce Lee; Editing by Jacqueline Wong

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