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South Korea has delayed voting on a bill that would ban Apple and Google from requiring developers to use their in-app purchasing systems, a move that would open the door to allowing third-party payment methods, representing a possible significant threat to Apple and Google's app marketplace business models.

Mac-App-Store-General-Feature.jpg

The bill, coming in the form of an amendment to the existing Telecommunications Business Act, was widely reported to have been voted on today. However, the National Assembly's schedule and agenda lacked mention of the amendment, instead focusing on other bills on the press, economy, and more. A date for the assembly to vote on the bill has not yet been set.

The bill, if it passes, will aim to stop Apple and Google from unfairly exploiting their position to "force a provider of mobile content, etc., to use a specific payment method," according to a readout of the bill.

It would also be the first time any government takes substantive legislative steps to regulate and control Apple and Google's app distribution platforms. Both platforms have been under increased scrutiny in recent years, with lawmakers, developers, and others calling out the need for regulation and a crackdown on behavior possibly deemed as "anti-competitive."

Apple's in-app purchasing system has been at the center of scrutiny ever since game developer Epic Games, in August of last year, avoided Apple's App Store policy by implementing a direct payment method in its hit game Fortnite. Apple's current App Store policy bans developers from allowing users to use payment methods other than the platform's, which gives Apple a 15% to 30% commission on all digital purchases made.

Apple has defended its system in the wake of the controversy, saying that it protects users from fraud and potential scams and offers developers an easy way to charge users for services and products without a need for significant overhead.

The bill has gained increasing support in the past few weeks, including from the Coalition for App Fairness. The coalition consists of Epic Games, Spotify, developers, and vocal anti-Apple critics taking issue with how Apple operates its App Store and the nature of its products. Earlier this month, the head of the coalition met with lead South Korean officials to lend their support for the bill.

It remains unclear how Apple and Google will respond or adjust their app marketplaces in South Korea once the bill does pass. Apple utilizes a single App Store policy for all the countries in which the App Store operates. Unless the company offers developers in South Korea a different set of rules, which could be a slippery slope for international developers, the company may be forced to alter its ways globally.

In brief remarks to reporters on Thursday, Han Sang-hyuk, the chairman of South Korea's Communications Commission, said his committee and colleagues are "fully aware of the concerns of Apple and Google" and that South Korea will work with both companies to implement the bill.

Apple charges all developers a $99 annual fee to be registered developers on its platforms. The company's commission charge for in-app purchases is one of just a few ways it collects revenue from the App Store. For the third quarter of this year, Apple recorded an all-time revenue record for its services business, including the App Store of $17.5 billion.

Last week, Apple settled with developers to changes to the App Store, including a change in App Store policy that will allow developers to email users about payment methods available outside of the platform. The updated policy allows users to opt into communication from developers informing them of payment methods outside the platform, bypassing the need for developers to give Apple a 30% commission.

Critics of the App Store have called the new policy a minimal change in the overall scheme of the App Store. Spotify's chief legal officer, Horacio Gutierrez, said that Apple's new policy fails to "address the most basic aspects of their anticompetitive and unfair App Store practices." Gutierrez goes on to say that Apple is "attempting to distract policymakers and regulators and slow down the momentum that’s building around the world to address their behavior."

Article Link: South Korea Delays Bill That Would Ban Apple From Requiring Developers to Use In-App Purchase System
 

840quadra

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Feb 1, 2005
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All of these regulations (worldwide and different nations) are going to amount to death by 1000 cuts. I wonder at what point companies like Apple / Google / etc just pull out of some markets, or go back to not offering some services in various nations due to all the regulations.

Price of being a big company (not just tech) here and now I guess.
 

Denzo

macrumors 6502
Sep 10, 2009
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Australia
It’s Korean so Samsung protection maybe? I don’t know why all these companies expect apple to open up the thing that got them rich?
 

nicho

macrumors 601
Feb 15, 2008
4,070
2,987
All of these regulations (worldwide and different nations) are going to amount to death by 1000 cuts. I wonder at what point companies like Apple / Google / etc just pull out of some markets, or go back to not offering some services in various nations due to all the regulations.

Price of being a big company (not just tech) here and now I guess.

My guess would be at this point.
 

syklee26

macrumors 6502a
Jul 26, 2005
507
971
This is not because of Samsung. Samsung, LG, SK and Hyundai know too well that bills lopsided toward domestic companies always come back to bite them when they try to sell their products overseas.

This bill is happening because of the amateur government at the helm. They have ratified so many idiotic bills without scrutinizing economic impact therefrom, and general Korean public are livid.

So, if the government ratifies this bill, then Apple will surely jack up Apple Developer Program price or something else to make up, and the only losers are those this lefty government intended to protect - small developers. Why can I see this coming from so far away? They have done this to every facet of Koreans’ lives. So sick of them.
 
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calzon65

macrumors 6502a
Jul 16, 2008
942
3,559
I know Apple created an amazing eco system for IOS, they did it, nobody else ... BUT ... I still wish there was an alternative to the Apple store to allow users a choice of picking applications certified by Apple in their store or an alternative. Microsoft does not demand that third-party software I run on my Windows system is purchased from their store, the same is true for Apple's MacOS.
 
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Krizoitz

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Apr 26, 2003
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I know Apple created an amazing eco system for IOS, they did it, nobody else ... BUT ... I still wish there was an alternative to the Apple store to allow users a choice of picking applications certified by Apple in their store or an alternative. Microsoft does not demand that third-party software I run on my Windows system is purchased from their store, the same is true for Apple's MacOS.
It’s fine to want this, I totally respect that. But Apple shouldn’t be forced to do it. Microsoft also doesn’t allow for 3rd party stores on Xbox, different products with different options, same as iPhone and Mac.
 
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cuiver

macrumors newbie
Jul 3, 2020
17
51
All of these regulations (worldwide and different nations) are going to amount to death by 1000 cuts. I wonder at what point companies like Apple / Google / etc just pull out of some markets, or go back to not offering some services in various nations due to all the regulations.

Price of being a big company (not just tech) here and now I guess.
Apple/Google would lose more pulling out. Doing so would leave huge markets in Europe and Asia open to unpredictable efforts. Obviously that some countries are trying to push their internal agenda on this to weaken North American influence becoming less and less reliant on them. This would make available huge amounts of data about their citizens and maybe other countries, becoming entirely at the mercy of national political movements/corporations, this was never about more choice for the consumer. Knowledge is power, and power is $$$.
 

Krizoitz

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Apr 26, 2003
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What is ridiculous is how often these sorts of fights get presented as about users, protecting users, offering users more choices when really it is only about money.
Yup, as an end user I’m thrilled that i don’t have to deal with dozens of different payment services to use my iPhone. Having Apple, a company I trust way more than Epic or any of the other “Coalition” members, be who handles my payment details is far superior. So yeah, to me this is a better system. The people who benefit from the alternative are not users, but other companies like Epic (who, meanwhile, do they exact same thing in their own store). Epic et. al can offer 3rd party stores on Android. They can develop their own smartphone OS. They can refuse to develop for iOS and try to get users to put pressure on Apple to change their mind. But forcing it by bills like this is BS. And this is the same Epic who was featured prominently by Apple for YEARS in the AppStore and at keynotes. Then Fortnite took off and people got addicted to micro transactions. Shame.

Honestly I’d love to see Apple either just completely disallow in app purchases in Korea or pull out of Korea if this bill ever passes. It’s hardly a key market given the dominance of Samsung in its home country.
 

Krizoitz

macrumors 68000
Apr 26, 2003
1,581
1,555
Tokyo, Japan
Apple/Google would lose more pulling out. Doing so would leave huge markets in Europe and Asia open to unpredictable efforts. Obviously that some countries are trying to push their internal agenda on this to weaken North American influence becoming less and less reliant on them. This will make available huge amounts of data about their citizens and maybe other countries, becoming entirely at the mercy of national political movements/corporations, this was never about more choice for the consumer. Knowledge is power, and power is $$$.
Apple pulling out of South Korea would have minimal impact on its bottom line. It’s a relatively small market and Samsung dominates with over 60% share. Apple is around 28%, which is no slouch by any means but still overall not a huge impact. Now if it happened in the EU, the US, or China, then your talking big deal.
 
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icanhazmac

macrumors 6502a
Apr 11, 2018
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Apple pulling out of South Korea would have minimal impact on its bottom line. It’s a relatively small market and Samsung dominates with over 60% share. Apple is around 28%, which is no slouch by any means but still overall not a huge impact. Now if it happened in the EU, the US, or China, then your talking big deal.

Agreed and if Apple's hand does get forced on this issue it would show other countries that they intend to protect their marketplace.
 

840quadra

Moderator
Staff member
Feb 1, 2005
8,526
4,146
Twin Cities Minnesota
Apple/Google would lose more pulling out. Doing so would leave huge markets in Europe and Asia open to unpredictable efforts. Obviously that some countries are trying to push their internal agenda on this to weaken North American influence becoming less and less reliant on them. This would make available huge amounts of data about their citizens and maybe other countries, becoming entirely at the mercy of national political movements/corporations, this was never about more choice for the consumer. Knowledge is power, and power is $$$.
I think it comes down to spreadsheets and numbers for companies to make such a decision. If they are spending millions in legal representation, dedicated software development, dedicated stores, dedicated support for each specific region, they could decide some markets aren't worth the $$$ needed to stay competitive and active in those markets.
 

Rian Gray

macrumors regular
Jul 13, 2011
182
30
NJ, United States
As someone who has lived in S. Korea over a decade, and now back in Korea again (got lucky before covid), this isn't so much as known tech giant issues, like related to Samsung or LG, but rather carriers and existing ancient industries behind it.

Before Apple made its landfall in S. Korea with iPhone 3GS, Korea was using its own national OS on cellphones amongst the three large carriers. This allowed the carriers to take advantage of app distribution in general. The rumor was, though it's often disputed, that a successful mobile game only resulted in couple thousands of dollars in revenues for the developers. Samsung's pre-Android smartphone suffered similar fates (lack of app diversity & odd features targeted only domestic market) with its Omnia line of products.

Same happened with its digital music market. Artists didn't make much, most of the earnings went to the distributers; Apple Music became the straw that broke this chain.

Not that Apple should take whole credit for these so-called "iPhone shock" in Korea, but it was quite inevitable. And it's somewhat expected for existing giants to try to fight back every now and then.
 

Shirasaki

macrumors G5
May 16, 2015
12,078
6,146
Heh. Who's behind the delay then? And why?
I wonder.
Certainly not because of pandemic, right?
 

So@So@So

macrumors member
Sep 26, 2019
52
198
All of these regulations (worldwide and different nations) are going to amount to death by 1000 cuts. I wonder at what point companies like Apple / Google / etc just pull out of some markets, or go back to not offering some services in various nations due to all the regulations.

Price of being a big company (not just tech) here and now I guess.
The EU may be next to regulate this, there are living more people in the EU than in the USA – do you really believe Apple will leave? And then – what's next, China, Russia, GB?
 

mschmalenbach

macrumors regular
Jul 22, 2008
165
98
Apple pulling out of South Korea would have minimal impact on its bottom line. It’s a relatively small market and Samsung dominates with over 60% share. Apple is around 28%, which is no slouch by any means but still overall not a huge impact. Now if it happened in the EU, the US, or China, then your talking big deal.
Good point - pulling out of a market might signal to others around the World that they implement similar laws in their countries at 'their own risk' - as is always the case, but this way they find out before the fact, not after it.

I suspect Apple will provide 2-tier system, Apple with all the protections & other benefits, and every other payment system without the same level of benefits, protections etc... so we have differentiated value for users/customers and they choose accordingly...
 

840quadra

Moderator
Staff member
Feb 1, 2005
8,526
4,146
Twin Cities Minnesota
The EU may be next to regulate this, there are living more people in the EU than in the USA – do you really believe Apple will leave? And then – what's next, China, Russia, GB?
It would all have to depend on cost (to Apple) to stay in business in such locations. Why would a company spend more than they earn in order to stay in a market? There has to be a cost / profit evaluation for every situation.
 

The_Gream

macrumors regular
Jul 16, 2020
105
195
Apple just needs to buy a small Latin American county, and just move everything there. You want an Apple product, fly there or have it mailed.
No more taxes for those other countries.

/s
 
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