South Korea approves new app marketplace rules

Apple and Google required to allow third-party payments

South Korea approves new app marketplace rules

South Korea has approved detailed rules for a new law that will prevent app marketplace leaders, namely Apple and Google, from forcing developers to use their payment system.

As reported by Reuters, the new rules, known as the enforcement ordinance, will be put into effect on March 15.

The country passed the law as part of an amendment to its Telecommunication Business Act in August last year.

The law is aimed at tackling the dominance that Apple and Google’s respective app marketplaces, the App Store and Google Play, maintain over apps and games on mobile, particularly the 30 per cent cut taken from all sales and in-app purchases.

No more prohibiting

The Korea Communications Commission (KCC) has stated that the new law will prohibit "the act of forcing a specific payment method to a provider of mobile content"

"In order to prevent indirect regulatory avoidance, prohibited acts' types and standards have been established as tightly-knit as possible within the scope delegated by the law," said KCC chairman Han Sang-hyuk.

Prohibited acts will include unfairly delaying the review of mobile apps and games, or interfering in mobile content that utilises third-party payment systems. Breaches of the new law could lead to a potential fine of two per cent of average annual revenue from related business operations.

Last year, Google was the first to announce changes in its practices following the new law, including reducing its service fee to 11 per cent if developers are using third party payments. Furthermore, Apple stated that it will be compliant with the new law in South Korea earlier this year.

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