Apple and Google Are Forced to Offer Alternative Payment Options in South Korea

• South Korea has taken a bold decision to pass a law that obliges mobile vendors to offer alternative payment methods.
• This means the App Store and the Play Store should not be the only ways to get your app to iOS and Android respectively.
• The companies responded to this by saying it’ll hurt app developers and undermine user trust in the platforms.

The South Korean government has just taken a very important step to becoming the first country to force Apple and Google to offer users an alternative payment option for apps and services on their mobile platforms. This is a thing that has been debated across the world for a long time now, disputed in courts, scrutinized by regulators, and defended by the companies. However, the latest development in South Korea may be the incident that will lead the way for many others.

The final decision was taken with a one-day delay as the National Assembly has voted today, but the relevant bill had passed by South Korea’s judiciary committee last Wednesday. Named the Telecommunications Business Act, the new legislation includes several points on how much “gatekeeping” is allowed on software app stores, how restrictive payment mechanisms affect competition, and what fees can be considered fair.

As expected, Apple responded to this by warning that the new law will essentially undermine people’s trust in the App Store and the iOS platform in general while also reducing the opportunities for the 480,000 registered developers in South Korea. Google stated something along the same lines, calling the decision to pass the law damaging for both the users and the app developers.

Although some will be celebrating this decision, hoping that it’ll create a domino effect, things aren’t free of legal complications. The policy wasn’t adjusted prior to the voting, as a spokesperson of the Korean Communications Commission told the press earlier, and some points that may be in violation of joint trade agreements with the United States have remained in place. If the U.S. government objects to the decision, we could see a modification to the law, so things are fluid at this point.

The scenario of seeing Apple and Google removing the App Store and Play Store from all devices sold in South Korea as retaliation is extremely unlikely, so there are no worries on that front. After all, the two wouldn’t want to risk it and create the ground for a real-world example of how an unregulated app ecosystem could work on their platforms. It may not be the chaotic situation they are constantly warning about, at least not if given enough time.