South Korea bans app marketplaces restricting third-party payments

The first country to implement such changes

South Korea bans app marketplaces restricting third-party payments

The South Korean parliament has approved a bill that will prevent app marketplaces from restricting third-party payments, making it the first country to do so.

As reported by CNBC, an amendment to the country’s Telecommunications Business Act was passed today and will become law once signed by President Moon Jae-in.

The President’s political party have been staunch supporters of the amendment to the bill.

Once the legislation is in effect, leading app store operators such as Apple and Google will need to enable third-party payments on the App Store and Google Play respectively.

This change will allow developers to avoid the industry standard 30 per cent commission that both marketplaces enforce, and promote third-party payment alternatives to users.

The law also provides the South Korean government powers of mediation between disputing parties with regards to payment, cancellations and refunds in app marketplaces.

The decision marks the end of a year-long discourse in the country regarding this issue, with 180 lawmakers voting in favour of the amendment.

Diminishing control

Over the past few years, the control that app marketplaces hold over developers has sparked debate. Most notably, at the forefront of discussion is Epic Games, which are currently embroiled in separate court cases with both Apple and Google over alleged marketplace monopolisation.

As the legal disputes ensue, both app marketplace owners have introduced commission rate cuts for certain developers.

Last year, Apple launched the App Store Small Business Program that halves the commission to 15 per cent taken for apps that earn less than $1 million annually. Similarly, Google stated in March that it would also half its commission for the first $1 million developers earn each year.

Last week, Apple announced that developers will now be permitted to promote non-App Store payment methods outside of apps, such as via email.

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The man formerly known as News Editor.