South Korea finalizes rules forcing App Store to take third-party payments

Posted:
in iOS
Lawmakers in South Korea have agreed on rules for a law passed in 2021 that aims to change how the App Store and other digital storefronts are managed and payments handled, a law that will come into force by March 15.




In August 2021, the South Korean government voted to approve the Telecommunications Business Act, affecting Apple and Google's control of their respective app stores. On March 8, lawmakers have finally decided on rules that Apple and Google must abide by within the country.

The Telecommunication Business Act aimed to stop Apple and Google from forcing developers into selling apps via the App Store and the ensuing payment of commission. The intention was to prevent a forced exclusivity of the in-app payment systems, as well as limiting store operators from unreasonably delaying or deleting apps.

The rules, referred to as enforcement ordinance, state the law bars "the act of forcing a specific payment method to a provider of mobile content" by using the status of the app market's operator, a Korea Communications Commission statement seen by Reuters states.

The rules also bar actions such as unfairly delaying reviews of mobile content, as well as refusing, delaying, or limiting the registration, renewal, or inspection of content that uses third-party payment systems. In short, the law forces Apple and Google to accept third-party app payments in apps included in app stores.

KCC Chairman Han Sang-hyuk said "In order to prevent indirect regulatory avoidance, prohibited acts, types, and standards have been established as tightly-knit as possible within the scope delegated by the law."

Lawmakers have given Apple and Google ample time to prepare for the law's implementation, and to offer details of plans to follow the law. Apple submitted its plan in January 2022.

However, in February, a KCC official said Apple's plan "still lacks concrete detail." There has been no public progress since then.

Nailing down the rules of the law itself, gives Apple and Google just a week to prepare for its enforcement, as the law goes live on March 15. Failing to abide by the law could cost store operators fines as much as 2% of average annual revenue from related business activities.

Read on AppleInsider

Comments

  • Reply 1 of 9
    mac_dogmac_dog Posts: 1,069member
    Apple should simply change their developer software and make it available for a fee—then charge for placement on the App Store. 
    lkrupprob53chaickawatto_cobra
  • Reply 2 of 9
    rob53rob53 Posts: 3,241member
    mac_dog said:
    Apple should simply change their developer software and make it available for a fee—then charge for placement on the App Store. 
    I believe Apple does charge developers a license fee to place apps on the Apple Store, it’s Xcode that doesn’t cost. 

    Apple has every right to charge developers a hosting and delivery fee, contrary to what Koras and other countries feel. Nothing is free in business and I don’t understand why these governments feel “companies” should get anything for free. As many of us have pointed out previously, many /most businesses force customers to use their designated payment system so why are Apple and Google being forced to do something different? Oh, yea, we just have to follow the money. 
    chaickawatto_cobra
  • Reply 3 of 9
    chaickachaicka Posts: 257member
    mac_dog said:
    Apple should simply change their developer software and make it available for a fee—then charge for placement on the App Store. 
    Sounds like how supermarkets operate:
    • Monthly rental for shelf-space, the more shelf-space the higher the rental fee (e.g. instead of flat developer fees, class/tiered-basis should work better);
    • % Commission of sales. the more sales the products generate the higher quantum;
    • Sales targets - higher sales volume = lower % of commission;
    • Each service required of supermarket staffs to perform/provide = more fees to pay (e.g. stacking/replenishing goods to the shelf when depleted).
    Use of different identifier/sku to track which payment model each app uses and flows through the processes. Since more work less automation involved for using 3rd party payment, there can be various tiered service catalog model for different class/tier of developer account.
    watto_cobra
  • Reply 4 of 9
    lkrupplkrupp Posts: 10,557member
    We’ll see how this goes. The Apple Discussion Forums are full of requests for refunds for all sorts of reasons. Just a week ago there was an article about some parent whose daughter ran up a $1K in-app purchase bill. The father started a media campaign to get Apple to refund the money, which they did. Let’s see what happens when a parent like that is told Apple has nothing to do with payments and the developer or their payment agent is the one to contact.

    On the Mac side of the house there are a few big payment agents that process payments for various developers outside the App Store. I’ve dealt with them and have had no issues so far. 

    I have been a big supporter of both the App Store payment system and the inability to side load but I’m not so sure anymore. The Mac has been this way since day one so why not iOS devices? The only problem is, if something goes sideways and customers get screwed, Apple will definitely get the blame and negative press coverage. We all should know that by now.
    edited March 2022 rob53mwhitejony0
  • Reply 5 of 9
    chaickachaicka Posts: 257member
    lkrupp said:
    We’ll see how this goes. The Apple Discussion Forums are full of requests for refunds for all sorts of reasons. Just a week ago there was an article about some parent whose daughter ran up a $1K in-app purchase bill. The father started a media campaign to get Apple to refund the money, which they did. Let’s see what happens when a parent like that is told Apple has nothing to do with payments and the developer or their payment agent is the one to contact.

    On the Mac side of the house there are a few big payment agents that process payments for various developers outside the App Store. I’ve dealt with them and have had no issues so far. 

    I have been a big supporter of both the App Store payment system and the inability to side load but I’m not so sure anymore. The Mac has been this way since day one so why not iOS devices?
    iPhone holds a lot more 'intimate' data than Mac do. The day that side-loading becomes forced-allowed, it may well be the day I start removing many 'intimate' data from iPhone. I have no wish to go through what Android is subjected to and how scams seem to be more successful at Android users due to more 'intimate' data being ripped.
    rob53aderutterwatto_cobra
  • Reply 6 of 9
    davgregdavgreg Posts: 1,036member
    Apple could just pay the fine and ignore this stupid requirement.
    watto_cobra
  • Reply 7 of 9
    rob53rob53 Posts: 3,241member
    The M-series SoC has the same T2-whatever chip components so hopefully personal information might start being moved into protected space away from the prying eyes of scammers. MacOS is also a multiuser system while iOS isn’t (yet?). Apple is doing a better job of protecting macOS from attack, forcing the use of a password to load software. Governments have ulterior motives to stop Apple’s progression into a really secure system because they feel they have the right to demand access to everything we have. You not only have to follow the money but also a government’s demand to know what everyone is doing. 
    watto_cobra
  • Reply 8 of 9
    aderutteraderutter Posts: 604member
    Apple will require a separate app for South Korea if the developer uses a different payment method and the developer will still have to pay 27% for the hosting, distribution, customer acquisition etc.

    Apple will likely provide an API for developers ot inform Apple of the sales made outside of Apple’ in-app payment method - so that Apple can collect the 27% they are due.

    Almost all developers will stick with Apple in-app payments for less hassle.
    jony0watto_cobra
  • Reply 9 of 9
    chaicka said:
    mac_dog said:
    Apple should simply change their developer software and make it available for a fee—then charge for placement on the App Store. 
    Sounds like how supermarkets operate:
    • Monthly rental for shelf-space, the more shelf-space the higher the rental fee (e.g. instead of flat developer fees, class/tiered-basis should work better);
    • % Commission of sales. the more sales the products generate the higher quantum;
    • Sales targets - higher sales volume = lower % of commission;
    • Each service required of supermarket staffs to perform/provide = more fees to pay (e.g. stacking/replenishing goods to the shelf when depleted).
    Use of different identifier/sku to track which payment model each app uses and flows through the processes. Since more work less automation involved for using 3rd party payment, there can be various tiered service catalog model for different class/tier of developer account.
    You do realize that supermarkets have very low profit margins. They only make up for it via high asset turnover per the DuPont equation.
    watto_cobra
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