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