South Korea likely to pass prohibitive app store legislation on Wednesday, report says

Posted:
in General Discussion edited August 2021
South Korea is poised to be the first country in the world to pass legislation targeting the management of app stores run by Apple and Google, with lawmakers reportedly likely to vote in favor of more stringent rules on Wednesday.

National Assembly of the Republic of South Korea


The bill, which amends South Korea's Telecommunications Business Act, is being dubbed the "Anti-Google law" by local media for its targeted language against owners of digital app stores. It is designed to force Apple and Google to allow alternative payment methods for in-app purchases, as well as place prohibitions on app store rules that would dissuade developers from marketing their wares on other platforms.

Currently, Apple takes an up to 30% cut of all in-app purchases and Google plans to implement a similar strategy next year.

The legislation passed committee scrutiny in the Korean National Assembly in July with minor resistance and now faces a vote in the judiciary committee before being sent to the full assembly and ratification by President Moon Jae-in.

South Korean lawmakers are expected to vote in favor of the amendment today, reports Reuters.

Both Apple and Google have been lobbying against the bill's passage for months.

Apple told Reuters that "user trust in App Store purchases will decrease as a result of this proposal -- leading to fewer opportunities for the over 482,000 registered developers in Korea who have earned more than KRW8.55 trillion to date with Apple."

A nearly identical statement was included in a report published by The New York Times on Monday, which cited a Google spokeswoman as saying the company believed the legislation would harm consumers and software developers.

Trade groups associated with Apple and Google are also fighting the measure. In October, the Information Technology Industry Council urged the U.S. Trade Representative to note concerns about the South Korean bill in an annual report on foreign trade. The group said passage of the legislation could violate joint trade agreements.

"We are engaging a range of stakeholders to gather facts as legislation is considered in Korea, recognizing the need to distinguish between discrimination against American companies and promoting competition," USTR representative Adam Hodge in statements to The Times and Reuters.

Apple and Google face comparable government scrutiny over their respective app store practices in other jurisdictions, including a fierce push against the whole of Big Tech in the U.S.

Read on AppleInsider
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Comments

  • Reply 1 of 22
    Finally!! A win for developers and customers
    edited August 2021 neoncatelijahg
  • Reply 2 of 22
    A very anticipated and well-overdue decision. I expect other countries to follow suit swiftly.
    elijahg
  • Reply 3 of 22
    rob53rob53 Posts: 3,251member
    lam92103 said:
    Finally!! A win for developers and customers
    Win for developers only. This customer will not like it and I bet I’m in the majority. 
    slow n easyStrangeDaysroundaboutnowbaconstangzeus423watto_cobraDetnator
  • Reply 4 of 22
    p-dogp-dog Posts: 131member
    rob53 said:
    lam92103 said:
    Finally!! A win for developers and customers
    Win for developers only. This customer will not like it and I bet I’m in the majority. 
    A win for big developers only. 
    slow n easyroundaboutnowrob53baconstangzeus423Alex_Vdewmewatto_cobra
  • Reply 5 of 22
    lkrupplkrupp Posts: 10,557member
    lam92103 said:
    Finally!! A win for developers and customers
    Nope. Total loss for developers and customers. Less exposure and more marketing costs for developers as they find themselves responsible for their own promotion. No more free marketing provided by Apple. Developer’s apps will just exist on the app store with no promotion unless they pay for it. What do you think that 30% cut was for anyway? They must fend for themselves. No cut for Apple means developers will have to pay more upfront for being on the app store shelves. Free apps will suffer or disappear onto third party app stores. 

    Higher prices, more confusion, and less security for customers as they are exposed to malware riddled third party app stores. Customers will buy an app on a third party app store only to find Apple will block it from running for security or privacy reasons. You think Apple is just going to roll over on this? If a third party app breaks Apple’s existing security/privacy rules do you really think they’ll let it run on iOS or iPad OS? That app will run for awhile and then suddenly break. 

    The only people who will benefit are the ones who don’t even know what the word ‘monopoly’ means. They’ll pay lip service to the ‘freedom’ they ‘won’ for themselves.
    slow n easyroundaboutnowrob53uraharacypresstreeRudeBoyRudyAlex_VJanNLdewmericmac
  • Reply 6 of 22
    ValdhorValdhor Posts: 4unconfirmed, member
    I would really like to see Apple just shut down the App Store in that particular country. “Apple can’t guarantee the security and privacy  of other app stores so must shut down the App Store to comply with local laws”. Let’s see these lawmakers struggling to keep these developers in country not to mention the huge outcry from customers.
    slow n easyzeus423AppleUfmyIdipdog3Alex_Vwatto_cobra
  • Reply 7 of 22
    gatorguygatorguy Posts: 24,213member
    lkrupp said:
    lam92103 said:
    Finally!! A win for developers and customers
    Nope. Total loss for developers and customers. Less exposure and more marketing costs for developers as they find themselves responsible for their own promotion. No more free marketing provided by Apple. Developer’s apps will just exist on the app store with no promotion unless they pay for it. What do you think that 30% cut was for anyway? They must fend for themselves. No cut for Apple means developers will have to pay more upfront for being on the app store shelves. Free apps will suffer or disappear onto third party app stores. 

    Higher prices, more confusion, and less security for customers as they are exposed to malware riddled third party app stores. Customers will buy an app on a third party app store only to find Apple will block it from running for security or privacy reasons. You think Apple is just going to roll over on this? If a third party app breaks Apple’s existing security/privacy rules do you really think they’ll let it run on iOS or iPad OS? That app will run for awhile and then suddenly break. 

    The only people who will benefit are the ones who don’t even know what the word ‘monopoly’ means. They’ll pay lip service to the ‘freedom’ they ‘won’ for themselves.
    Down killer.

    The bill won't mandate alternative app stores from what I'm reading. It will mandate alternative payment systems, as well as impose penalties for the first-party app stores if they put rules in place to penalize a developer who wants to place their app on other platforms. I wasn't aware the latter was a problem so perhaps it also addresses a developer who wishes to direct-market their app rather than thru the stores?

    In any event, this is not about alternative app stores.
    edited August 2021 muthuk_vanalingamelijahgurashid
  • Reply 8 of 22
    omasouomasou Posts: 573member
    This will be a total cluster f**k. People will click to make an in-app purchase and they will be redirect to some web site...Oh, hi...Your new...Create an account...etc. At which point they will think they are being scammed and the user will try and figure out how to go back to pay at Apple or Google but betting the app will forced them to ONLY use the other system at which point, IMHO, I think people will look for a new app unless it is something they really, really like. If the apps do only accept their chosen payment system won't that be the exact opposite anticompetitive behavior?

    Apple and Google will probably solve it by asking for either lower in-app purchase commissions or restructuring their commission rates schedules and have a higher initial app purchase commission fee when an app uses their own in-app payment option. After all the platforms subsides the app store hosting costs, through ALL commissions, app and in-app. Apps using their own in-app payment option should pay higher commissions for the initial app purchase b/c they aren't paying their fair share and supporting the platform like other apps.

    It'll be fun to watch the ensuing chaos B)
    edited August 2021 StrangeDaysbaconstangMisterKitwatto_cobra
  • Reply 9 of 22
    22july201322july2013 Posts: 3,572member
    In the long run this is a huge win for Apple and Google, because they now have the opportunity to pull their business (at least their app store businesses) out of South Korea (the moment the new law takes effect) and show the world the consequences of what happens when governments make a 25% profit level and free enterprise illegal.

    Of course, if Apple and Google don't pull out, then it's a loss for them, because their 30% fee (which is probably a 20-25% profit level for that service) on services will collapse worldwide. But Apple and Google need to appear that they aren't happy about this development. And baed on what I read in this article, they appear unhappy.

    I don't expect a single human being to see it my way, so I'm not planning to come back here to see everyone calling me a fool. And I don't expect to be hailed as a prophet if Apple and Google do exactly as I'm suggesting. I'm glad Biden and the US government is so anti-big-tech, it means these events are more likely to happen. I am so excited about this news, and I suspect the top people in Apple and Google feel privately the same.
    DAalsethbaconstangAppleUfmyI
  • Reply 10 of 22
    gatorguygatorguy Posts: 24,213member
    omasou said:
    This will be a total cluster f**k. People will click to make an in-app purchase and they will be redirect them to some web site...Oh, hi...Your new...Create an account...etc. At which point they will think they are being scammed and the user will try and figure out how to go back to pay at Apple and Google but will probably be forced to ONLY use the other system at which point, IMHO, I think people will look for a new app unless it is something they really, really like.

    It'll be fun to watch  B)
    If that's what happens it will mean that developer will make less revenue, in which case they'll backtrack. Common business sense. 

    All of them, Apple, Google, and the developers, are in this for one reason only: Make mo' money. However they can do so best is what they'll do. This ain't gonna be "for the users", and never has been. The more Apple, developers, et al can skim from your wallet the happier they will be. This is just about how they'll divvy up the spoils.
    edited August 2021 baconstangmuthuk_vanalingamelijahg
  • Reply 11 of 22
    flydogflydog Posts: 1,123member
    lkrupp said:
    lam92103 said:
    Finally!! A win for developers and customers
    Nope. Total loss for developers and customers. Less exposure and more marketing costs for developers as they find themselves responsible for their own promotion. No more free marketing provided by Apple. Developer’s apps will just exist on the app store with no promotion unless they pay for it. What do you think that 30% cut was for anyway? They must fend for themselves. No cut for Apple means developers will have to pay more upfront for being on the app store shelves. Free apps will suffer or disappear onto third party app stores. 

    Higher prices, more confusion, and less security for customers as they are exposed to malware riddled third party app stores. Customers will buy an app on a third party app store only to find Apple will block it from running for security or privacy reasons. You think Apple is just going to roll over on this? If a third party app breaks Apple’s existing security/privacy rules do you really think they’ll let it run on iOS or iPad OS? That app will run for awhile and then suddenly break. 

    The only people who will benefit are the ones who don’t even know what the word ‘monopoly’ means. They’ll pay lip service to the ‘freedom’ they ‘won’ for themselves.
    Customers are unlikely to benefit much, but most of what you posted is absolute nonsense. 
    muthuk_vanalingamelijahg
  • Reply 12 of 22
    flydogflydog Posts: 1,123member
    In the long run this is a huge win for Apple and Google, because they now have the opportunity to pull their business (at least their app store businesses) out of South Korea (the moment the new law takes effect) and show the world the consequences of what happens when governments make a 25% profit level and free enterprise illegal.

    Of course, if Apple and Google don't pull out, then it's a loss for them, because their 30% fee (which is probably a 20-25% profit level for that service) on services will collapse worldwide. But Apple and Google need to appear that they aren't happy about this development. And baed on what I read in this article, they appear unhappy.

    I don't expect a single human being to see it my way, so I'm not planning to come back here to see everyone calling me a fool. And I don't expect to be hailed as a prophet if Apple and Google do exactly as I'm suggesting. I'm glad Biden and the US government is so anti-big-tech, it means these events are more likely to happen. I am so excited about this news, and I suspect the top people in Apple and Google feel privately the same.
    Another absurd post.  Read the article. Doesn’t say Apple and Google are prohibited from charging any fees. 
    muthuk_vanalingamelijahgwatto_cobra
  • Reply 13 of 22
    rob53rob53 Posts: 3,251member
    ...
    Of course, if Apple and Google don't pull out, then it's a loss for them, because their 30% fee (which is probably a 20-25% profit level for that service) on services will collapse worldwide. But Apple and Google need to appear that they aren't happy about this development. And baed on what I read in this article, they appear unhappy.

    ...
    It would be nice to hear from Apple about their App Store cost. Also, I believe I read somewhere that large developers don't pay 30% anyway. I don't know how much profit Apple gets from iCloud storage accounts either. Apple needs to buy the server hardware, license the software, create and maintain all the software necessary for everything, create the interface between the App Store and credit card companies, pay for the running of the server farm facilities including employees, and a bunch of other things. When an app costs 99-cents, Apple gets a whopping 30-cents. That doesn't really pay for much of anything. Way too many people have commented on overhead costs of other industries.
    Alex_Vwatto_cobra
  • Reply 14 of 22
    gatorguygatorguy Posts: 24,213member
    rob53 said:
    ...
    Of course, if Apple and Google don't pull out, then it's a loss for them, because their 30% fee (which is probably a 20-25% profit level for that service) on services will collapse worldwide. But Apple and Google need to appear that they aren't happy about this development. And baed on what I read in this article, they appear unhappy.

    ...
    It would be nice to hear from Apple about their App Store cost. Also, I believe I read somewhere that large developers don't pay 30% anyway. I don't know how much profit Apple gets from iCloud storage accounts either. Apple needs to buy the server hardware, license the software, create and maintain all the software necessary for everything, create the interface between the App Store and credit card companies, pay for the running of the server farm facilities including employees, and a bunch of other things. When an app costs 99-cents, Apple gets a whopping 30-cents. That doesn't really pay for much of anything. Way too many people have commented on overhead costs of other industries.
    Estimates by experts in the field are that Apple realizes at least a 70% net, and probably closer to 80%. The App Store is incredibly profitable as is Google Play.
    muthuk_vanalingamAlex_Velijahg
  • Reply 15 of 22
    uraharaurahara Posts: 733member
    There are so many solutions which Apple could use to counter it.
    E.g. (unreasonable, but just to demonstrate creative approach to it) have the apps split by Apple Pay, Free and other payments app filter. Just dump all apps for other payments just in alphabetical order, without any top apps, no discover ability, no search function for them. They still could be found and downloaded, but yo would need to scroll the list very very long to get to apps names staring with B. And they would need to pay X amount for each download. Those who do not pay will be kicked out from the store. The End.
    watto_cobra
  • Reply 16 of 22
    rob53rob53 Posts: 3,251member
    gatorguy said:
    rob53 said:
    ...
    Of course, if Apple and Google don't pull out, then it's a loss for them, because their 30% fee (which is probably a 20-25% profit level for that service) on services will collapse worldwide. But Apple and Google need to appear that they aren't happy about this development. And baed on what I read in this article, they appear unhappy.

    ...
    It would be nice to hear from Apple about their App Store cost. Also, I believe I read somewhere that large developers don't pay 30% anyway. I don't know how much profit Apple gets from iCloud storage accounts either. Apple needs to buy the server hardware, license the software, create and maintain all the software necessary for everything, create the interface between the App Store and credit card companies, pay for the running of the server farm facilities including employees, and a bunch of other things. When an app costs 99-cents, Apple gets a whopping 30-cents. That doesn't really pay for much of anything. Way too many people have commented on overhead costs of other industries.
    Estimates by experts in the field are that Apple realizes at least a 70% net, and probably closer to 80%. The App Store is incredibly profitable as is Google Play.
    Trying to do the math. How can Apple realize a 70% net when they only charge 30%? Are we talking 70% net of every product or just the App Store? I see nothing wrong with those percentages if they cover the entire product line because I'm sure lots of businesses double or triple the prices they pay for products before selling them.
    watto_cobra
  • Reply 17 of 22
    Apple is not a utility and thus not regulated or subject to profit controls.  Why governments get involved in trying to determine what profit level is reasonable and   just in a free market for something Apple invented, is double talk.  Either it’s a free market or not.  If the platform is too expensive, then don’t build an app for it.  If developers walk away, they will have to adjust their policies/charges.  Also, anytime a politician gets involved, it’s to help a special interest that paid them off.  Otherwise, they would not think twice about an App Store.  There are surely more pressing matters to solve.  
    watto_cobra
  • Reply 18 of 22
    gatorguygatorguy Posts: 24,213member
    rob53 said:
    gatorguy said:
    rob53 said:
    ...
    Of course, if Apple and Google don't pull out, then it's a loss for them, because their 30% fee (which is probably a 20-25% profit level for that service) on services will collapse worldwide. But Apple and Google need to appear that they aren't happy about this development. And baed on what I read in this article, they appear unhappy.

    ...
    It would be nice to hear from Apple about their App Store cost. Also, I believe I read somewhere that large developers don't pay 30% anyway. I don't know how much profit Apple gets from iCloud storage accounts either. Apple needs to buy the server hardware, license the software, create and maintain all the software necessary for everything, create the interface between the App Store and credit card companies, pay for the running of the server farm facilities including employees, and a bunch of other things. When an app costs 99-cents, Apple gets a whopping 30-cents. That doesn't really pay for much of anything. Way too many people have commented on overhead costs of other industries.
    Estimates by experts in the field are that Apple realizes at least a 70% net, and probably closer to 80%. The App Store is incredibly profitable as is Google Play.
    Trying to do the math. How can Apple realize a 70% net when they only charge 30%? Are we talking 70% net of every product or just the App Store? I see nothing wrong with those percentages if they cover the entire product line because I'm sure lots of businesses double or triple the prices they pay for products before selling them.
    ?
    Net 70% profit from the percentage they keep from the AppStore. From every 30 cents they keep as their cut from each dollar you spend in the AppStore it costs 9 cents in supporting services and hardware to earn it. That leaves 21 cents as profit. That's a very healthy return, so no wonder Apple is so big on "Services" which at least for now comes primarily from the AppStore.
    elijahgmuthuk_vanalingam
  • Reply 19 of 22
    genovellegenovelle Posts: 1,480member
    lam92103 said:
    Finally!! A win for developers and customers
    Not when Apple stops investing in an unprofitable platform as they should. Nothing is ever free. 
    watto_cobra
  • Reply 20 of 22
    lkrupp said:
    Plam92103 said:
    Finally!! A win for developers and customers
    Nope. Total loss for developers and customers. Less exposure and more marketing costs for developers as they find themselves responsible for their own promotion. No more free marketing provided by Apple. Developer’s apps will just exist on the app store with no promotion unless they pay for it. What do you think that 30% cut was for anyway? They must fend for themselves. No cut for Apple means developers will have to pay more upfront for being on the app store shelves. Free apps will suffer or disappear onto third party app stores. 

    Higher prices, more confusion, and less security for customers as they are exposed to malware riddled third party app stores. Customers will buy an app on a third party app store only to find Apple will block it from running for security or privacy reasons. You think Apple is just going to roll over on this? If a third party app breaks Apple’s existing security/privacy rules do you really think they’ll let it run on iOS or iPad OS? That app will run for awhile and then suddenly break. 

    The only people who will benefit are the ones who don’t even know what the word ‘monopoly’ means. They’ll pay lip service to the ‘freedom’ they ‘won’ for themselves.

    You clearly have no idea about the industry and the current reality. 

    As a founder and CEO of a mobile gaming company focused on licensing IP and developing games that I sold 3 years ago + having released over 20 iOS titles, I can tell you that the situation you are describing already is a fact, and it has been for years.

    Apple is so big and there are so many developers, that you already have to spend millions on marketing to be seen. Apple is not helping you for the 30% cut. They do jack shit.

    In fact the whole situation is corrupt and rigged.
    Apple only gives you 1 day of exposure on their “release wall” on the App Store. Only when THEY decide to promote you, they’ll contact you and you’ll have a week or so of promotion.

    Still, that doesn’t help. Only by spending long geo-betas on improving retention and user acquisition, and many dollars on advertisements (that will have to have extremely healthy ARPU and ARPDAU wise in their returns), you can keep a game alive. 

    In fact we noticed the best one revenue wise were done through a publisher, but it leaves you with much less (luckily I spent 13 years to make 3 successful breakout titles and build tech IP value hence my company sale, NOT because of Apple!).

    1. first you pay a minimum guarantee for the license and/or hundreds of thousands for development 
    2.  30% of a sale is taken by Apple (who does jackshit)
    3. then the remainder is split between you,  publisher (and license holder if applicable) at a tier basis often.
    4. But the above: only net-of-advertisements (most of the time a negative end result, unless you break through the barrier with a hit).
    5. And: net-of-maintenance (you have to maintain the game on a daily basis, sometimes more expensive than the actual initial development depending on genre)
    6. Oh - and then you pay taxes. Considerable.

    The App Store is not a store. It’s become the economy itself on one of just 2 platforms. It’s insane. It must be stopped.

    So please stop having this discussion at a toddler level and think about the actual economics. 
    edited August 2021 elijahggatorguyOctoMonkey
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