S.Korea to control commission dominance in Google, Apple
South Korea plans to ban Google and Apple from applying charges to software developers’ commissions on in-app purchases. The first such barriers by a major economy could damage the tech giants’ profitable revenue.
On Tuesday, the parliament’s judiciary committee and legislation plan to approve the revision of the Telecommunications Business Act named the Anti-Google law. It bans app store operators from forcing specific payment systems.
If this bill receives the committee’s approval, it will move to a final vote on Wednesday. South Korea’s Lawmakers began to raise the tech giants’ commission structure issue in the middle of last year.
Apple and Google received global criticism because they expect software developers to use exclusive in-app payment systems charging commissions of more than 30% on in-app purchases.
Last year, the European Union introduced the Digital Markets Act, aiming at app store commissions. The company designed rules to affect large firms, but some western lawmakers favor tightening them to target American technology giants.
A bipartisan trio of senators proposed a bill in the United States earlier this month. This bill would restrain popular app stores of firms that exercise too much market control, including Google and Apple.
According to a government report published last year, in South Korea, the home market of Samsung earned revenue of nearly 6 trillion, equal to $5.28 billion, with its Google Play Store in 2019.
Google announced that it would lower its developers’ service fee on its app store earlier this year. The fee could be between 30% to 15% in a year after earning the first $1 million in revenue. Apple made similar moves.
Commissions from in-app purchases seem to be a crucial part of Apple`s $53.9 billion services business and a significant expense for a couple of app developers.
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