South Korea Could Ban Apple From Requiring Developers to Use In-App Purchase System

[MacRumors]

South Korea may soon ban Apple and Google from requiring app developers to use their in-app purchase systems, reports Reuters.

South Korea's legislation and judiciary committee is expected to approve an "Anti-Google Law" that amends the existing Telecommunications Business Act. It will require Apple and Google to allow third-party payment methods in their app stores in South Korea, and it will let developers use independent payment systems.

If the amendment is approved by the committee, the National Assembly of South Korea will hold a final vote on Wednesday. Support for the bill has been picking up, and earlier this month, officials in South Korea met with the founder of the Coalition for App Fairness and the senior vice president of Match Group, both vocal anti-Apple critics.

In a statement to Reuters, Apple said that the legislation "will put users who purchase digital goods from other sources at risk of fraud, undermine their privacy protections, make it difficult to manage their purchases."

If passed, Apple believes the bill will cause user trust in App Store purchases to fall, which will lead to "fewer opportunities for the over 482,000 registered developers in Korea who have earned more than KRW8.55 trillion to date with Apple."

Apple currently collects 15 to 30 percent commission on in-app purchases made through the App Store, and developers are required to use the company's in-app purchase system. Apple's App Store rules and restrictions are at the heart of its legal battle with Epic Games and are the target of similar legislation in the United States and Europe.

An antitrust bill proposed in the United States earlier this month would force Apple and Google to allow third-party app stores and sideloading, while the European Commission last year introduced the Digital Markets Act that would regulate how app stores operate in Europe.

Article Link: South Korea Could Ban Apple From Requiring Developers to Use In-App Purchase System

 

[farewelwilliams]

sounds like south korea's committee has no clue what the hell they're doing. indie developers rely on app store resources that are paid for by in app purchases. ?‍♂️

 

[kenny7]

South Korea would be the first country to require third-party payment methods. FINALLY!!!!!

 

[dba415]

If the app is on your store then I think having them forced to use your in-app purchasing system is okay. But they should allow other app stores to be made.

 

[coolfactor]

I'm siding less and less with Apple on this.

Many payment providers support integration into systems/websites/apps (via an internet API), so Apple could easily support multiple payment providers through the App Store, but then the developer needs to be charged a fee for that ability up-front. It can't be free. And payment can't be handled entirely in an outside system, because them how will Apple know that a payment has been completed to release the app or in-app purchase to the consumer?

Unless done right, it will become very messy for users, more messy than many ad-supported apps currently are.

Apple is not wrong ... trust will degrade. The motivation can't be to bypass the 15-30% fee. Apple just needs to recuperate (at least part of) that revenue in another way directly from the developers. There's a cost for Apple regardless of how payments are processed by apps.

 

[TheYayAreaLiving 🎗️]

Looks like they don’t want anything to do with apple and google

 

[now i see it]

The noose tightens

 

[MuppetGate]

"Undermine their privacy protections"

We're going with that one are we? Okay then …

 

[coolfactor]

If the app is on your store then I think having them forced to use your in-app purchasing system is okay. But they should allow other app stores to be made.

I agree that Apple could release a "Store Framework" allowing independent stores to be built, but on top of a framework built by Apple. This would provide competition between "merchants" in the app ecosystem, much like eBay and Amazon marketplaces.

I don't see stores being built outside of some level of Apple's control / guidance. This is Apple's platform at the end of the day, not an open platform. Apple is the "governing body" at the end of the day, just like in the real world marketplace. Rules and laws establish order to protect consumers.

 

[DHagan4755]

I believe a lot of malls & shopping centers charge tenants for a percentage profit, in addition to the rent. Thus if the App Store is an extension of the mall in a virtual sense, what Apple is doing is not out of bounds with in-app purchases. Someone correct me if I'm wrong here.

 

[britboyj]

sounds like south korea's committee has no clue what the hell they're doing. indie developers rely on app store resources that are paid for by in app purchases. ?‍♂️

Then they can use the App Store resources purchase methods.

Banning a requirement is A-ok.

 

[brandnewshmoney]

In-app purchases are an easy steal for Apple. Trillions of dollars are transacted on iPhone with 3rd party payment systems - From amazon, uber rides, banking, stock trading, you name it - but that $1.99 skin on Fortnite is where Apple suddenly becomes security concious and cant trust developers to use their own payment system ??

Apple are geniuses at Marketing. To develop for iPhone, you MUST buy a Macbook. The decent onces go for $2000. Then you MUST pay $99 a year whether you publish to the App Store or not. But despite all that, you still havent "Contributed to the App Store" unless you give them "30%" of your in app purchase...But not Amazon, Uber, Airbnb, Robinhood, Banks, Ecommerce stores, Facebook and Google ad networks.. they get to keep their money, but the small developer selling digital goods, thats who they are finessing with this 30% tax.

You want to know why they charge 30% for digital goods but force every physical goods & services business to use 3rd party payments? Because digital goods involve ZERO work on apples end. Its all pure profit. But imagine Uber, Airbnb, Robinhood, Facebook all had to use in-app purchase? Apple would need to hire 1 Million customer service agents to handle those - they wisely chose not to. So they targeted the easiest money they can make and sold it under "security", "Privacy", "Paying for the app Store"

 

[vagos]

I believe a lot of malls & shopping centers charge tenants for a percentage profit, in addition to the rent. Thus if the App Store is an extension of the mall in a virtual sense, what Apple is doing is not out of bounds with in-app purchases. Someone correct me if I'm wrong here.

Don't compare it with malls. It's a computing platform and it should be free as windows and macos are. We don't need apple as the gatekeeper to download our software. We deserve lower prices for software. Apple makes enough money from selling the phones at a premium anyway.

 

[ponzicoinbro]

The Google and Apple stores aren’t perfect but this is madness considering the massive wave of cybercrime that we experience and has grown during the pandemic. The amount of scams that would target users is scary and they will have nobody to help them.

So many apps have developers in far corners of the world and they won’t lift a finger to refund you. Some apps will be published just to collect money and disappear.

So many fronts for terrorist groups could release some cute kid’s game app that takes a bunch of money and then uses it to go commit violence somewhere.

 

[4743913]

sounds like south korea's committee has no clue what the hell they're doing. indie developers rely on app store resources that are paid for by in app purchases. 🤦‍♂️

did you read the article? they can still use the app store in-app purchases. this just gives the freedom to use other means if you don't want to share your hard earned money with a 2 trillion dollar company...

 

[Darmok N Jalad]

Apple is going to have a much harder time selling privacy and security as the reasoning now. We probably just need a good FAQ to set us straight though.

 

[macintoshmac]

This should be fun to watch unfold.

 

[Madmic23]

I'm just going to put my usual rule here:

• If the content is hosted on Apple servers, like more levels or characters for a game, I'm ok with the app having to use Apple's in-app payment system.
• If the content is hosted on an outside server, like a Kindle book or the Netflix or Spotify content libraries, the option should exist to use third-party payments systems.

Apple doesn't get a cut when I buy a product through the Amazon app, why should they get a cut on virtual items?

 

[contacos]

Such bull … ! Guess what Apple, I already made 5 online purchases with my credit card or PayPal today! and I have yet to be victim of fraud after 33 years on this planet. Apple isn’t the holy grail of payments and if their App review process was so great, there wouldn’t be anything to be worried about anyway right?

 

[albert421]

just itemized the app store fee. apple

 

[brandnewshmoney]

I'm siding less and less with Apple on this.

Many payment providers support integration into systems/websites/apps (via an internet API), so Apple could easily support multiple payment providers through the App Store, but then the developer needs to be charged a fee for that ability up-front. It can't be free. And payment can't be handled entirely in an outside system, because them how will Apple know that a payment has been completed to release the app or in-app purchase to the consumer?

Unless done right, it will become very messy for users, more messy than many ad-supported apps currently are.

Apple is not wrong ... trust will degrade. The motivation can't be to bypass the 15-30% fee. Apple just needs to recuperate (at least part of) that revenue in another way directly from the developers. There's a cost for Apple regardless of how payments are processed by apps.

Payments sytems are just software. How do you think Facebook, Amazon, Google, Airbnb and Uber handle their payments on iPhone? They use Stripe or Paypal. Even apple uses Stripe for Apple pay on the web. So what your talking about is already a reality on the app store minus the part were Apple charges devs for using 3rd party payment systems.

That would be a huge encroachment. Why then can't Apple force devs to use Apple databases, host on apple servers in the name of privacy and security then charge for it? There goes half the internet's businesses.

 

[_Spinn_]

I absolutely do not want third party app stores or other payment options in apps. I don’t want to give my payment info to every app/store under the sun and risk potential data leaks where my credit card number gets stolen. I trust Apple to keep my payment info secure. That’s why I don’t buy much online. I limit my purchasing to Amazon (since if they were hacked everyone would be screwed) and websites that take Apple Pay or PayPal (which is a pain to use). I don’t give my credit card numbers out anywhere else.

If Apple could require apps to provide both Apple’s and 3rd party IAP I guess that would be the least bad of all options. I doubt Apple would be allowed to do that though - this would probably see this as an abuse of their market position. Allowing 3rd party IAP also introduced headaches for the consumer when trying to dispute charges or get refunds.

I’m mostly worried about apps that only support 3rd party IAP or are walled behind third party app stores. While it has been pointed many times out that I can just ignore those apps, what happens when there is one that I actually need (not just want)?

As far as allowing third party app stores, I could potentially see larger devs like say Google forcing users to install their App Store to get their apps (based off what they did with Windows Phone this doesn't seem that far off). Or what if some government like Russia forced all apps installed in their country to go through their App Store? Who knows what kind of surveillance could be injected this way. If third party stores could also offer ApplePay that would potentially be better than nothing.

As a consumer I already have options for what payment method actually backs Apple's IAP - whether that be a credit card (Visa, MasterCard, Discover, etc.), PayPal via linked AppleID account, or cash via purchased gift cards. This isn't really about consumers, this is about devs that don't want to give Apple a cut of the payments. I highly doubt prices would be lower with 3rd party IAP - Apple already lowered their commission from 30% to 15% for most apps and I'm not aware of any that have lowered their prices to pass the savings onto the consumer. The App Store has already done a lot to lower software prices for consumers. Before the App Store most commercial software was $50 - $100 or more.

Physical stores already limit what payment methods consumers can use. Visa and MasterCard are accepted pretty much everywhere though Costco only accepts Visa. I've already been to places that won't accept my Discover card and American Express has an even lower acceptance rate than Discover. Some stores don’t even accept credit cards. There are even stores that will give you discounts for using their store loyalty/credit card. Should they be forced to accept all credit cards?

Allowing third party stores will benefit large devs the most since they will have the infrastructure to host them (think Microsoft, Google, Amazon, Epic) and then they can pocket 100% of their IAP themselves. This won't help small devs nearly as much - they would have to partner with other app stores to be hosted. I can even envision certain apps being signed to exclusive deals with certain stores (similar to how streaming services get their exclusive content). What happens if an app moves stores? Do I need to re-download it again to continue to get updates? Will I have to re-buy my IAP since that was tied to the original store?

Many like to try and draw a comparison between iOS and Mac OS/Windows but that really isn't really the same thing. iOS has always been closed while Mac OS and Windows have always been open (more or less). This is nothing like a formerly open system suddenly locking things down so apps can only be installed from an app store. If anything this is more like the model game consoles have.

If this starts being enforced on Apple these changes need to be applied to game consoles as well. Going to your local store to buy a physical copy doesn’t get around the “App Store” tax since Sony, Microsoft, and Nintendo still control the physical distribution (disc or cartridge) channels as well. Game consoles have had this walled garden approach going all the way back but somehow this is an issue now because why? I’ve seen some people comparing buying used games akin to side loading apps but to me that seems to be a stretch since the console makers still had to approve the software and got money from the original sale.

Again this isn’t about consumers. This is about big devs being greedy and wanting a free ride off Apple’s infrastructure.

 

[velocityg4]

I expect Apple will charge paid apps some sort of hosting fee, tiered developer pricing plan or something else.

 

[brandnewshmoney]

If the app is on your store then I think having them forced to use your in-app purchasing system is okay. But they should allow other app stores to be made.

Is the app still in your store when a user buys it and its on their homescreen? When you buy a Playstation from bestBuy, its no longer in best buy's store --- Bestbuy cant force sony to use their payments in playstation store simply because the hardware was purchased from their store.

The store has to end somewhere. I think it ends in the homescreen.

 

[dguisinger]

I'm siding less and less with Apple on this.

Many payment providers support integration into systems/websites/apps (via an internet API), so Apple could easily support multiple payment providers through the App Store, but then the developer needs to be charged a fee for that ability up-front. It can't be free. And payment can't be handled entirely in an outside system, because them how will Apple know that a payment has been completed to release the app or in-app purchase to the consumer?

Unless done right, it will become very messy for users, more messy than many ad-supported apps currently are.

Apple is not wrong ... trust will degrade. The motivation can't be to bypass the 15-30% fee. Apple just needs to recuperate (at least part of) that revenue in another way directly from the developers. There's a cost for Apple regardless of how payments are processed by apps.

The whole point is Apple is providing next to nothing for those digital "goods". They aren't providing the digital content. They aren't providing the backend that provides those services. Many of those systems exist fully outside of the Apple and Google ecosystems on the web, so they already have their payment infrastructure in place. Just one side charges 3%, and the other side demands you use their system and oh by the way, pay us 30% for delivering no value add.

You want to charge developers for making software, do it up front. Increase your developer fees. On the bright side, maybe it will eliminate a lot of crap that is making the app store bloated.

On the other hand, maybe they shouldn't actually charge developers anything. My argument is the iPhone would have been nothing without developers. A lot of the big developers on mobile were on desktop or web long before iOS (Yeah, thats probably changed a bit as we've hit the 15 year mark, its not all the old guard of developers anymore) ... they didn't need Apple to invent the iPhone. Did it help them? Sure, but Apple would be no where without their apps. They would be a company with dwindling PC market share, stuck on Intel, probably no phone market share having been replaced by more open platforms, and the iPod would have died out. Everyone knows the exploding iPhone business made Apple what it is today.

The original iPhone without app support sold okay, but it was nothing close to the success they saw after creating the App store. Apps add value to the platform, they make people want to buy the hardware. So IMHO don't nickel and dime your developers and focus on making the OS and hardware the best it can be. You are already making more than enough in that business to pay for all of its development - especially Apple with the highest margins in the industry. All of that R&D that people around here claims goes into the tools needs to happen regardless because they are used to make the system.