Image: Google, Apple

The battle over in-app or third-party payments has escalated. South Korea has passed a law that requires Apple and Google to allow alternative payment systems, or face fines.

It amends the country’s Telecommunications Business Act to ban operators from requiring purchases through their own stores. The law also includes provisions to prevent operators from retaliating against app developers (e.g., deleting their apps or their approval). Violators will be subject to fines of 3 percent of their South Korean revenue by the country’s media regulator. The law will be signed by President Moon Jae-in.

Both companies have been entangled in legal battles with the Epic Games Store over their policies, which some have described as anti-competitive. Lawmakers and regulators in the EU and US are looking closer into these practices. Each may be eyeing the progress of the new law as guidance for future legislation.

Image: American University

The law amends South Korea’s Telecommunications Business Act to prevent large app-market operators from requiring the use of their in-app purchasing systems. It also bans operators from unreasonably delaying the approval of apps or deleting them from the marketplace—provisions meant to head off retaliation against app makers.

Source: The Wall Street Journal (via Engadget)

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Peter Brosdahl

As a child of the 70’s I was part of the many who became enthralled by the video arcade invasion of the 1980’s. Saving money from various odd jobs I purchased my first computer from a friend of my...

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11 Comments

  1. Hmm. I haven’t read the law but on first blush seems like it has enough loopholes to be toothless.

    Like right now Apple could argue they aren’t stopping anyone from purchasing something through the third parties website or other store front. They don’t prohibit the purchase in any way, they just don’t allow direct access to that from inside their walled garden.

    That also applies to apps and subscriptions – the “light” version of an app can be made Free in the App Store, then require a code (which could be purchased directly on a web site or other storefront) to unlock full functionality. Plenty of apps do this, including Amazon Kindle and Netflix.

    So I don’t know how the law as I read it here really changes anything.

  2. Would be really hilarious if they both said:

    “Oh well, I guess we are pulling out of South Korea effective immediately then”, immediately blocking access to all of their services and bricking all of their devices in the country, and ceasing all business operations in the country so they no longer fall under their jurisdiction.

    Then they could sit back and watch the politicians in the country back track as their voters get pissed off for their missing services and non-functional devices.

    Just once, I’d like to see a major corporation have that kind of balls :p

  3. [QUOTE=”Zarathustra, post: 40594, member: 203″]
    Would be really hilarious if they both said:

    “Oh well, I guess we are pulling out of South Korea effective immediately then”, immediately blocking access to all of their services and bricking all of their devices in the country, and ceasing all business operations in the country so they no longer fall under their jurisdiction.

    Then they could sit back and watch the politicians in the country back track as their voters get pissed off for their missing services and non-functional devices.

    Just once, I’d like to see a major corporation have that kind of balls :p
    [/QUOTE]

    Problem with that is that South Korea has Samsung. Samsung is EASILY big enough to sue Google into oblivion and say thank you to Apple for all of the new business and offer models of Samsung devices to replace Apple Devices for a small net fee with trade in.

    Samsung could and has in the past write their own OS’s for the phones they Sell if Google were to prohibit sales of the Android OS in South Korea. Or they would find or enforce a contractual avenue to let them do as they please.

    Google is big, but it isn’t Samsung powerful. Google makes some cars and neat software. Samsung makes freaking Tanks and fighter jets in addition to everything else.

  4. [QUOTE=”Grimlakin, post: 40603, member: 215″]
    Google is big, but it isn’t Samsung powerful. Google makes some cars and neat software. Samsung makes freaking Tanks and fighter jets in addition to everything else.
    [/QUOTE]

    I went and looked it up, because I was curious. The two companies are not that far away from each other in terms of size. Samsung is bigger, but only by about 10%

    [URL unfurl=”true”]https://www.statista.com/statistics/236607/global-revenue-of-samsung-electronics-since-2005/[/URL]

    [URL unfurl=”true”]https://www.statista.com/statistics/266206/googles-annual-global-revenue/[/URL]

  5. [QUOTE=”Brian_B, post: 40606, member: 96″]
    I went and looked it up, because I was curious. The two companies are not that far away from each other in terms of size. Samsung is bigger, but only by about 10%

    [URL unfurl=”true”]https://www.statista.com/statistics/236607/global-revenue-of-samsung-electronics-since-2005/[/URL]

    [URL unfurl=”true”]https://www.statista.com/statistics/266206/googles-annual-global-revenue/[/URL]
    [/QUOTE]

    Yeah, Samsung follows in the tradition of Korean companies who have their fingers in everything though. On my first PC I had a Hyundai monitor.

    Large corporations there wind up being very diversified like that, whereas in the west the management philosophy tends to be that you do better if you focus on your core competencies, and let people who are better at other things do those things.

    I wonder what it is about the culture that leads them down this path.

  6. [QUOTE=”Grimlakin, post: 40603, member: 215″]
    Problem with that is that South Korea has Samsung. Samsung is EASILY big enough to sue Google into oblivion and say thank you to Apple for all of the new business and offer models of Samsung devices to replace Apple Devices for a small net fee with trade in.

    Samsung could and has in the past write their own OS’s for the phones they Sell if Google were to prohibit sales of the Android OS in South Korea. Or they would find or enforce a contractual avenue to let them do as they please.

    Google is big, but it isn’t Samsung powerful. Google makes some cars and neat software. Samsung makes freaking Tanks and fighter jets in addition to everything else.
    [/QUOTE]

    So, I agree with Brian. The size difference really isn’t that large.

    That said, I agree with you as well. In the “never going to happen” event of a complete withdrawal of Apple and Google from the marketplace, Samsung would likely eventually come out with their own software for their phones eventually. And this is not to mention the fact that Apple is also a customer of Samsung, buying many of their components (screens, chips, etc.) from them.

    In the short term though, it would be absolutely devastating, and fun to watch :p

  7. [QUOTE=”Brian_B, post: 40606, member: 96″]
    I went and looked it up, because I was curious. The two companies are not that far away from each other in terms of size. Samsung is bigger, but only by about 10%

    [URL unfurl=”true”][URL]https://www.statista.com/statistics/236607/global-revenue-of-samsung-electronics-since-2005/[/URL][/URL]

    [URL unfurl=”true”][URL]https://www.statista.com/statistics/266206/googles-annual-global-revenue/[/URL][/URL]
    [/QUOTE]

    My point was more to the statement that Samsung would THANK Google and APPLE if they pulled out of the South Korea market and hope that Huwai and others do the same as they became an Samsung primary device user with Samsung OS’s and everything else.

  8. [QUOTE=”Zarathustra, post: 40609, member: 203″]
    Samsung would likely eventually come out with their own software for their phones eventually
    [/QUOTE]
    [URL=’https://www.pocket-lint.com/phones/news/samsung/127527-what-is-tizen-and-what-devices-will-it-appear-on’]Samsung has their Tizen OS[/URL]

    [QUOTE=”Grimlakin, post: 40603, member: 215″]
    Samsung makes freaking Tanks and fighter jets in addition to everything else.
    [/QUOTE]
    Apple and Google have [I]plenty[/I] invested in US Defense, and they may very well be invested in foreign defense. Just not weapons systems. That said, there’s quite a bit of cross-pollination there too, with Korean parts/tech on US weapons systems and vice-versa (and the rest of the free world too).

    [QUOTE=”Zarathustra, post: 40607, member: 203″]
    Large corporations there wind up being very diversified like that
    [/QUOTE]
    This happens in Japan too, and it may just be a symptom of both the size of the ‘local’ economy and how long it’s been industrialized. It’s been interesting to see Korean products out-competing some Japanese products over the last couple of decades for example.

  9. [QUOTE=”LazyGamer, post: 40626, member: 1367″]
    This happens in Japan too, and it may just be a symptom of both the size of the ‘local’ economy and how long it’s been industrialized. It’s been interesting to see Korean products out-competing some Japanese products over the last couple of decades for example.
    [/QUOTE]

    Hyundai anyone? I’m looking at the Telluride very closely as my next vehicle. Ok next next … current next will probably be a Harley trike. Or a converted Valkyrie.

  10. [QUOTE=”Grimlakin, post: 40629, member: 215″]
    Hyundai anyone? I’m looking at the Telluride very closely as my next vehicle. Ok next next … current next will probably be a Harley trike. Or a converted Valkyrie.
    [/QUOTE]
    That one’s definitely making an impression. Buddy bought a Kia Stinger a while back that could get right sideways with the fun switch engaged.

    I wouldn’t put them on the same level as Toyota and Honda yet, but since they don’t charge as much, I don’t look down on them either, and respect the significant strides they’ve made.

    But in terms of ‘conglomerates’ versus corporate specialization, the Japanese and Koreans seem to have followed a similar path, with Korea blooming roughly twenty years or so later if they could be compared against a theoretical average. Market saturation and demand at their respective peaks of industrial development seem to have influenced which niches each country has invested and excelled in. And both have the dominating ‘mega-conglomerate’ business pattern going on.

    Whereas the US has had significant competition that has resulted in [I]many[/I] felled giants, and China definitely has the entrepreneurial diversity to follow a similar pattern. I’d even bet that having that competition will be a priority for The Party, and it should result in higher standards of living for their subjects, on average.

    You can bet, of course, that China wouldn’t blink if Apple or Google pulled out. Though that would put even more pressure on Samsung and TSMC to get US operations set up post haste!

  11. [QUOTE=”LazyGamer, post: 40626, member: 1367″]
    This happens in Japan too, and it may just be a symptom of both the size of the ‘local’ economy and how long it’s been industrialized. It’s been interesting to see Korean products out-competing some Japanese products over the last couple of decades for example.
    [/QUOTE]
    A lot of it was coming out of WWII – Asian companies looked to the US to emulate to rebuild their economies. At the time, the US was into the really big conglomerate companies who did a little bit of everthing – GE being probably the most prominent.

    They happened to do it better than the US.

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