ADIF credits South Korea’s efforts towards building a fairer app economy, by curbing anti-competitive and restrictive practices of app store operators who enjoy a dominant market position. The country has taken a leading step to curtail the monopolistic practices of both Apple and Google – mainly mandating their own payment systems that charge commissions of up to 30% to publish apps on their marketplace.
There has been a worldwide backlash against Apple and Google over their mandatory high commission on digital goods, and anti-trust watchdogs globally are investigating their abusive practices. South Korea has, however, been the first to put its foot down by passing a law to reign in these global giants.
In India as well, the Competition Commission of India (CCI) has been investigating both Google and Apple for their abuse of power. However, the fact that Apple has blatantly ignored the order from Netherlands’ top competition regulator and has instead chosen to pay fines rather than do anything to change its policies, highlights the urgent need and importance of legislative reforms.
In August 2021, the South Korean National Assembly amended the Telecommunications Business Act in order to prohibit dominant app store operators from coercing developers to use their proprietary payment systems. On March 8, 2022, authorities published a detailed set of rules titled ‘the enforcement ordinance’ on the same legislation – which is set to go live on March 15, 2022.
The rules state the law bars “the act of forcing a specific payment method to a provider of mobile content”. 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. Failing to abide by the law could cost store operators fines as much as 2% of average annual revenue from related business activities.
Sijo Kuruvilla George, Executive Director, ADIF said, “ADIF welcomes this move and believes that it is an important step towards creating a level-playing field for the startup and developer communities. We also hope that it sets the right precedent to be followed in the future by other nations looking to build a competitive app economy.”