Apple pushing back against South Korea's App Store payment law

Posted:
in General Discussion edited October 2021
Apple has reportedly told South Korea lawmakers that it is already compliant with a law that requires it to accept alternative payment methods in the App Store, setting up a new anti-trust conflict within the country.

App Store


The Korea Communications Commission (KCC) is in charge of enforcing compliance with the new App Store payment law. While Google says that it plans to comply in full with the law, including the adoption of third-party payment systems, Apple appears to be resisting it, saying that there is nothing that it needs to change.

The report by Reuters on Friday morning cites an official inside the KCC, saying that Apple's claim "goes against the purpose of the amended law." The official requested anonymity, as Apple is apparently still in discussion with the KCC about compliance.

Should talks fail, the KCC is likely to launch a new anti-trust investigation against Apple. The group's most common remedy is fines applied to businesses found in violation of the laws and regulations.

An anti-trust attorney in South Korea sees a rough road ahead for Apple if it does not comply with the spirit of the law, despite the company believing it is adhering to the letter of it.

"Differences between Apple and Google in willingness to give ground may be because Apple controls everything from hardware to operating system (OS) to app market to payment system," antitrust lawyer Jung Jong-chae told Reuters. "[Apple] has more to lose if its dominance breaks on any front, which could lead to calls for openness on other fronts."

The law, which was dubbed the "Anti-Google law" by local media, bans both Apple and Google from forcing developers to utilize first-party payment systems for in-app purchases. Additionally, the amendment to existing laws places prohibitions on app store rules that force exclusivity to one app store or another.

Korea's new legislation represents the first successful effort by a major government to force app store owners to allow alternative payments. While the Korean action is not expected to significantly impact either company's bottom lines, remarkably similar laws are under consideration in the U.S. and other countries -- which may have a larger financial impact when the totality of all of them are considered.

Apple has previously argued that the legislation puts the safety and security of App Store customers in jeopardy.

"The proposed Telecommunications Business Act will put users who purchase digital goods from other sources at risk of fraud, undermine their privacy protections, make it difficult to manage their purchases, and features like 'Ask to Buy' and Parental Controls will become less effective," Apple said after the bill sailed through South Korea's parliament in September.

Read on AppleInsider

Comments

  • Reply 1 of 8
    KTRKTR Posts: 278member
    Dumb ass government 
    Bosaviclauyycwatto_cobra
  • Reply 2 of 8
    mcdavemcdave Posts: 1,927member
    Depends on how the legislation is worded. Apple has always allowed 3rd-party payment systems, you can add hundreds of different Visa, Mastercard cards or PayPal to your AppleID.
    If they meant App Stores, that’s a different thing entirely. If the justification is monopoly abuse then transferring the sale from Apple to a single 3rd-party (developer) doesn’t solve this.
  • Reply 3 of 8
    entropysentropys Posts: 4,135member
    Apple will try to negate this, but plan c could also be to just pay the tax.
    watto_cobra
  • Reply 4 of 8
    KTRKTR Posts: 278member
    Bosa said:
    I lived in South Korea and if people thought Trump saying America First was disrespect to others around the world, let’s just say Korea is “Korea first x 10”, in fact that is case with most Asian countries.

    anyways,back to this law, let’s just say  if this law was harmful to Koreas own Samsung or LG, it would not have happened.

    Don’t be naive
    I personally believe its WE, THE PEOPLE SHOULD DECIDE. Not the government.  If apple decides to stop selling their products in that country of in the region.  Can you imagine how may people will loose their job.  Developers want to cash in on the apple loyal customers.  They tend to sent MORE money on apple products.  The they don't want to pay the piper?  I don't understand that.  I wonder how many people developers feel this way?

    https://www.cnbc.com/2021/05/21/snap-ceo-evan-spiegel-were-happy-to-pay-apple-30percent.html


    watto_cobra
  • Reply 5 of 8
    KTR said:
    Bosa said:
    I lived in South Korea and if people thought Trump saying America First was disrespect to others around the world, let’s just say Korea is “Korea first x 10”, in fact that is case with most Asian countries.

    anyways,back to this law, let’s just say  if this law was harmful to Koreas own Samsung or LG, it would not have happened.

    Don’t be naive
    I personally believe its WE, THE PEOPLE SHOULD DECIDE. Not the government.  If apple decides to stop selling their products in that country of in the region.  Can you imagine how may people will loose their job.  Developers want to cash in on the apple loyal customers.  They tend to sent MORE money on apple products.  The they don't want to pay the piper?  I don't understand that.  I wonder how many people developers feel this way?

    https://www.cnbc.com/2021/05/21/snap-ceo-evan-spiegel-were-happy-to-pay-apple-30percent.html
    Guy whose app is structured so it doesn't have to pay Apple a "commission" says he would be happy to pay Apple a commission.

    So, bad example, but I agree with your argument. In some ways it reminds me of the early credit card negotiations: Visa wanted to restrict merchants from passing on the charge for using a credit card, arguing that people paying with a credit card would spend more money than those paying by cash or cheque. That is, a person purchasing with credit is more likely to purchase more (or more expensive) things than a person paying with funds they currently controlled. So overall a store would make more money by not passing on the fee.

    Funnily enough, Visa benefitted more from this arrangement than the merchants. But you don't hear of merchants refusing to accept credit cards these days - there was enough benefit for the merchant to pay the fee for the chance to increase their sales. And if you are willing to pay a fee to increase your sales, then the exact percentage is part of your calculation of whether or not to agree to that fee - if your business can't afford it, then you don't adopt it. If you don't know if your business can afford it before you agree... well, solve that knowledge problem first, because if you can't afford it and sign up anyway, it's your fault for not knowing your business well enough.
    watto_cobra
  • Reply 6 of 8
    darkvaderdarkvader Posts: 1,146member
    Hopefully the Korean government will take Apple to the woodshed over this one.

    If big fines don't work, maybe some Apple executives being hit with international arrest warrants would.
    williamlondongatorguy
  • Reply 7 of 8
    gatorguygatorguy Posts: 24,101member
    darkvader said:
    Hopefully the Korean government will take Apple to the woodshed over this one.

    If big fines don't work, maybe some Apple executives being hit with international arrest warrants would.
    That happened to Apple in Italy a few years ago. They were refusing to cooperate on paying ordered back taxes to their government and so arrest warrants for EU Apple execs were ordered. Apple promptly changed tactics and agreed to pay the taxes due without further delay.
    edited October 2021
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