South Korea’s parliament on Tuesday approved a bill that bans major operators such as the Apple App Store and Google’s derivative Play store from forcing software developers to use their payment systems, effectively stopping them from charging commissions on in-app purchases.
It is the first such curb by a major economy on the likes of Apple Inc and Alphabet Inc’s Google, which face global criticism for requiring the use of proprietary payment systems that charge commissions of up to 30%.
The final vote was 180 in favour out of 188 attending to pass the amendment to the Telecommunications Business Act…
“We believe user trust in App Store purchases will decrease as a result of this proposal – leading 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 said in a statement.
“We’ll reflect on how to comply with this law while maintaining a model that supports a high-quality operating system and app store, and we will share more in the coming weeks,” a Google spokesperson said in a statement to Reuters.
MacDailyNews Take: The Republic of Samsung passes a law that penalizes law-abiding companies – every store charges commissions – that benefit Samsung.
Par for the corrupt South Korean course.
What is the alternative? A monthly user fee for all active/inactive users who use an app?
A data-processed fee per GB for data transitioning through Apples servers?
A $100,000 fee for each new app someone wants to upload to Apple’s store?
Once an App is downloaded I doubt that data has to transition through Apple’s servers, especially for large developers who have probably set up their own data servers for use by their Apps on AWS or the like.
This is great… Developers will return most of the 30% back to users by discounting the price of their app… And if you believe that, I have a nice bridge in New York I think you should buy from me LOL.
Companies like Netflix that avoided in-app subscriptions would with this ruling which removes the ‘overhead’ of the commission and just include the option in their Apps rather than have users go to their website to make payments.
Im confused? Apple own and created this store. No one is forced to trade in it and any developer can set up a website and trade. If you want to shop in Apples store you have to pay the charges they want to charge and the in app purchases are part of the charges that help the store stay at the top.
Why do developers want to use the power of Apple to become successful but then complain about the fee for the success of being on the store ?
Its Apples shop and its constantly evolving and requiring servers, maintenance and upgrades. The cost structure is designed to help low income developers while making sure high income developers get a structured commission discount.
The only solutions now are to charge a massive one off fee based on the companies gross company income over 5 years or better still pull the store from that region.
if not this will snow ball and Apple will lose control of their app business.
“Apple own and created this store. No one is forced to trade in it and any developer can set up a website and trade.“
If there were only other stores for iOS Apps you wouldn’t be so wrong.
WWSD (What Would Steve Do)
You could inform your Korean customers that your shutting down the App Store for Korea because of government interference and threaten to pull your facilities out of Korea. Let the Korean government deal with the huge public backlash and risk of job losses. I have a feeling then, this stupid law would disappear.
No more free apps for users if the developers offer in-app purchases. Apple can charge a $10 flat fee per app downloaded as the cost of doing business. Of course, they run the risk of having South Korea change the laws to allow sideloading and other app stores. Security in a walled garden is hard enough. When you open that up, expect security nightmares.
Simple. Remove the ability for in-app purchases in Korea. The PS4 doesn’t allow it, and no one seems to mind the upfront cost.
Apple will charge higher fees to the developers anything they can squeeze out of them and that will be a good thing. This will only hurt the small developers. But hey its what the 3% of users want. I hope Apple and Google pull out of SK, they can claim they need to figure out a way to do this, might take a few years.
I wonder if the concept of no commissions on in-app purchases could be analogous to buying a lemonade stand from Costco (just assume you can for this). No reasonable person would expect the kid running the stand to have to pay a commission on any sales to Costco once the stand is in his/her possession.