South Korean Bill That Could Allow Third-Party Payment Methods on the App Store Gains Support Ahead of Vote

[MacRumors]

A bill that could require Apple and Google to allow third-party payment methods on their respective app stores in South Korea is gaining support ahead of a vote on the issue.

The bill proposes an amendment to the existing Telecommunications Business Act, which would bar Apple, Google, and any other company that operates its own app distribution platform, from forcing developers to use a specific payment method. Apple requires that all apps on the App Store use its own payment method for in-app purchases, which gives the company a 30% commission.

That 30% cut and restrictions on developers that prevent them from using third-party payment methods has been a significant point of contention between Apple and other companies. The Coalition for App Fairness, which consists of Epic Games, Spotify, and Match Group, has voiced their support for the bill in South Korea.

As reported by the Yonhap News Agency, the founder of the Coalition for App Fairness and the senior vice president for the Match Group, which operates Tinder, met with officials in the South Korean Democratic Party to express their support for the bill. As per the report:

Mark Buse, Match Group's senior vice president and a founding member of the Coalition for App Fairness, met ruling Democratic Party lawmakers at the National Assembly supporting the bill.

Buse expressed support for the bill, adding that it could spur more action from U.S. lawmakers. Similar movement has so far been made at a state level in the United States in around 15 states, according to Buse.

Apple has pushed back firmly against any measures that would open up its users to third-payment methods. In an interview earlier this year, Apple's CEO, Tim Cook, said that allowing third-payment methods on the App Store would turn the platform into a "flea market," noting that customers usually tend to have a low trust level for such markets.

The bill will first be reviewed by the Legislation and Judiciary Committee before being voted upon in the National Assembly.

Article Link: South Korean Bill That Could Allow Third-Party Payment Methods on the App Store Gains Support Ahead of Vote

 

[Agit21]

That’s it. All around the world governments are working against Apple. Good!

 

[noonas_the_mac_head]

I guess in the end, the membership fee to have your app allowed on iOS / be in the App store will be increased for all.

 

[LeeW]

Only takes one to do it and others will follow. Not saying what is right or wrong, Epic took it Global and all they need is for one to force the change.

 

[AppleTO]

Even if Apple is forced to allow 3rd party payment methods, nothing will change. Developers will still be changed a fee by Apple, per user purchase, just separately.

The new rule will be something like: “You may use 3rd party payment methods however they must go through “ThirdPartyPaymentKit””, which Apple can then keep track of purchases and amounts.

 

[Havoc035]

If one government decides to pass a bill like this it will be interesting to see how Apple will adapt it business model. I expect they'll want to continue seeing similar profits. The could increase the price of the development program or charge developers that use third party payment methods through some other means (per download?). It's only fair that developers that earn money on the App Store pay for at least storage and listing.

Regardless, the customer will lose out as the App Store purchasing user experience will deteriorate due to the hodgepodge of reliable and unreliable payment methods.

 

[Sasparilla]

Only takes one to do it and others will follow. Not saying what is right or wrong, Epic took it Global and all they need is for one to force the change.

As to why South Korea beyond Samsung (Android), Epic worked with Samsung to set up a separate download (essentially the side loading) of Fortnite BR several years ago when Epic tried to avoid putting it in the Google store (that failed at the time), but they have good connections and of course Sammy has good connections with their Legislature.

 

[AdmiralTriggerH]

If they are forced to do it, I'll vote with my money and stick to using Apple's payment processor or they don't get my money.
I am not a massive Epic fan due to the way they prey on children and they desires to have the cool stuff to make their money.
I also don't use Spotify because I think they have a poor business model and don't pay artists enough.
I very rarely use in app purchases either, the ones I do use are for video stream subscriptions

 

[Marbles1]

A Marketplace of marketplaces is good.

it will force some of them e.g. apple to actually make good their promises of 'quality' and security. I'd happily stick with paying through the App Store if I knew they cared about quality - e.g. every app needs a free demo, all trash is culled. That's the point of a curated App Store.

 

[PC_tech]

A bill that could require Apple and Google to allow third-party payment methods on their respective app stores in South Korea is gaining support ahead of a vote on the issue.

The bill proposes an amendment to the existing Telecommunications Business Act, which would bar Apple, Google, and any other company that operates its own app distribution platform, from forcing developers to use a specific payment method. Apple requires that all apps on the App Store use its own payment method for in-app purchases, which gives the company a 30% commission.

That 30% cut and restrictions on developers that prevent them from using third-party payment methods has been a significant point of contention between Apple and other companies. The Coalition for App Fairness, which consists of Epic Games, Spotify, and Match Group, has voiced their support for the bill in South Korea.

As reported by the Yonhap News Agency, the founder of the Collation for App Fairness and the senior vice president for the Match Group, which operates Tinder, met with officials in the South Korean Democratic Party to express their support for the bill. As per the report:
Apple has pushed back firmly against any measures that would open up its users to third-payment methods. In an interview earlier this year, Apple's CEO, Tim Cook, said that allowing third-payment methods on the App Store would turn the platform into a "flea market," noting that customers usually tend to have a low trust level for such markets.

The bill will first be reviewed by the Legislation and Judiciary Committee before being voted upon in the National Assembly.

Article Link: South Korean Bill That Could Allow Third-Party Payment Methods on the App Store Gains Support Ahead of Vote

Yet, the flea market is packed every weekend 🙄

 

[mrbobdobolina]

Offering 3rd party payment methods is better than offering 3rd party app stores, IMO. I imagine Apple will update their terms of service to ensure they aren't liable for any 3rd party payment issues. A few people will get burned by some bad actors who steal their CC information, and Apple will blame the 3rd party payments since it's not under control.

I could also see Apple changing their fee model where your developer subscription is based off your app downloads if you allow 3d party payments.

Really, there's lots of things Apple can do to abide by the letter of the law while discouraging developers from doing it.

 

[JonGarrett]

If one government decides to pass a bill like this it will be interesting to see how Apple will adapt it business model. I expect they'll want to continue seeing similar profits. The could increase the price of the development program or charge developers that use third party payment methods through some other means (per download?). It's only fair that developers that earn money on the App Store pay for at least storage and listing.

Regardless, the customer will lose out as the App Store purchasing user experience will deteriorate due to the hodgepodge of reliable and unreliable payment methods.

That was the most sheepish response I've ever read.

Give me an example of an unreliable 3rd party payment method.

 

[I7guy]

Apple should charge by the download, say $10,000 per download. Basically they are forcing apple and google to give developers a free ride on their ecosystem. Maybe instead they should force grocery chains to give away (free) groceries, telco companies to provide unlimited, high speed bandwidth for free, etc.

 

[contacos]

Even if Apple is forced to allow 3rd party payment methods, nothing will change. Developers will still be changed a fee by Apple, per user purchase, just separately.

The new rule will be something like: “You may use 3rd party payment methods however they must go through “ThirdPartyPaymentKit””, which Apple can then keep track of purchases and amounts.

GDPR wouldn’t allow this

 

[incoherent_1]

I’m sure this law targeting Apple has nothing to do with the fact that Samsung is headquartered just down the road from where this law was written. Just a happy coincidence.

 

[himanshumodi]

If they are forced to do it, I'll vote with my money and stick to using Apple's payment processor or they don't get my money.
I am not a massive Epic fan due to the way they prey on children and they desires to have the cool stuff to make their money.
I also don't use Spotify because I think they have a poor business model and don't pay artists enough.
I very rarely use in app purchases either, the ones I do use are for video stream subscriptions

I don't think Epic will mind whether you pay through Apple or their payment method, as long as they get what they want.

 

[chrono1081]

That’s it. All around the world governments are working against Apple. Good!

This actually isn't good. Once you notice the enormous issues fragmentation brings with it you'll be back pedaling in no time.

 

[lkrupp]

GDPR wouldn’t allow this

So you think Apple should be forced to allow app developers free space on the App Store and bypass Apple’s fee structure to boot? How does Apple make a profit from the App Store then? Why keep the App Store open under those conditions? Shut it down and let developers fend for themselves.

 

[chrono1081]

That was the most sheepish response I've ever read.

Give me an example of an unreliable 3rd party payment method.

I will! Paypal. Ever have to dispute with them? I have and lost out $500 despite having certified letters from my bank showing that the money was never deposited.

 

[JonGarrett]

Apple should charge by the download, say $10,000 per download. Basically they are forcing apple and google to give developers a free ride on their ecosystem. Maybe instead they should force grocery chains to give away (free) groceries, telco companies to provide unlimited, high speed bandwidth for free, etc.

Free ride?? Where would Apple and Google be without developers?

If every developer pulled their apps from birth stores right now you iPhone becomes a paperweight and your Android phone would still operate because you can install apps outside of Google's control--so developers would set up their own app stores.

 

[contacos]

So you think Apple should be forced to allow app developers free space on the App Store and bypass Apple’s fee structure to boot? How does Apple make a profit from the App Store then? Why keep the App Store open under those conditions? Shut it down and let developers fend for themselves.

No. Nothing stops Apple to still offer their great developer platform, in fact they can use its perks as great marketing to get even more people on board while giving others the option to do it their own way. Apple has the visibility. Developers are not just going to abandon the App Store all of the sudden.

Do you think the average iOS user would bother to research and install a 3rd party store like „ipapure“ or „ipamirror“, when the phone already comes with the App Store installed? I doubt it but it’s good enough for those that would (options).

 

[I7guy]

Free ride?? Where would Apple and Google be without developers?

If every developer pulled their apps from birth stores right now you iPhone becomes a paperweight and your Android phone would still operate because you can install apps outside of Google's control--so developers would set up their own app stores.

Where would these developers be without apple and google. For almost $0 upfront cost and virtually risk free a dev can take a stab at an app to make some serious bucks. What do you think happens when a dev goes it alone? They have to market, distribute, etc. All of those cost serious $$$.

Let the devs pull their apps and go it alone. It's a lose for them more than Apple and Google.

 

[hagar]

Good day for Belgium. We also got real-time public transit info in Apple Maps today.

 

[JonGarrett]

So you think Apple should be forced to allow app developers free space on the App Store and bypass Apple’s fee structure to boot? How does Apple make a profit from the App Store then? Why keep the App Store open under those conditions? Shut it down and let developers fend for themselves.

Developers don't need Apple, Apple needs developers. Would you buy an iPhone right now if it only contained stock apps???

If every developer pulled their apps from the app store right now, whose business would suffer more, theirs or Apple's?

Those developers would build their own app store or move their apps to Android.

If Google tried to get cute, users already have multiple ways to install apps and other content.

 

[Gabebear]

The best outcome I see is the law sets a maximum percent that can be charged and Apple just drops the fee to that maximum(no third party payments, but everyone is happy because it's only 2-3% commission).

If Apple has to come up with a new model things will get bumpy.

• Charge per download in South Korea?
• Charge per app listing in South Korea?
• Disallow all in-app payments in South Korea?
• Charge to allow third-party payments per app?
• Apple could allow developers to hook up their own processing behind Apple's payment system(allowing Apple to do chargebacks for refunds and allow Apple to cancel subscriptions)
  • While this sounds kinda nice... I see it blowing up and ending up in lawsuits fairly quickly.

Hopefully this will end up with a compromise.