Korean Communications Commission Bans App Stores And Play Stores Forcing App Developers To Use Their Payment Systems

JAKARTA - South Korea's telecommunications regulator made a breakthrough in a new law on Tuesday, March 8. Authorities in the country have approved detailed legislation that prohibits dominant app store operators, such as Apple Inc and Alphabet's Google, from forcing software developers to use their payment systems.

South Korea passed the law, as an amendment to the Telecommunications Business Act, last year.

It was the first restraint by a major economy on Apple and Google. The two companies continue to face criticism globally for requiring the use of their proprietary payment systems and charging commissions of up to 30%, on each software developer who sells their applications on the App Store and Play Store.

The rules, called the enforcement ordinance, will go into effect on March 15. They determined that the law prohibits "the act of coercing certain payment methods onto mobile content providers" by unfairly exploiting the operator status of the app marketplace. This was emphasized by the regulators of the Korea Communications Commission (KCC) in their official statement.

"In order to prevent circumvention of indirect regulations, the types and standards of prohibited acts have been set as strictly as possible within the scope delegated by law," said KCC chairman Han Sang-hyuk, as quoted by Reuters.

Prohibited actions between application market operators, unfairly delaying the review of mobile content, or denying, delaying, limiting, deleting or blocking registration, renewal or inspection of mobile content using third-party payment methods.

According to the new regulation in South Korea, the potential fine for violating this new rule can reach 2% of the average annual income from related business practices.

Apart from South Korea, several countries have also begun to require the App Store and Play Store to provide payment systems from third parties. This decision was based on the antitrust and healthy competition regulations adopted in several countries.

Only me, in Indonesia, the polemic about this has not arisen. The App Store and Play Store remain free to force application developers in the country to use the payment systems of Apple Inc and Alphabet Inc's Google.