What you need to know
- South Korea is changing its laws regarding App Store payments.
- Apple will no longer be allowed to make developers use in-app payments.
- The company has been asked for its compliance plans by mid-October.
South Korea has asked Apple and Google for their compliance plans for new laws that will dramatically change app store rules in the country.
Reuters reports:
Apple (AAPL.O) and Alphabet's (GOOGL.O) Google have been asked to turn in by mid-October compliance plans for a new South Korean law that bans major app store operators from forcing software developers to use their payment systems, a regulatory official said on Wednesday.
According to the report enforcement ordinances will be drawn up in the next six months, with most of the law already having gone into effect. It will have a big impact on Apple's App Store, with the company no longer allowed to mandate that transactions go through its own in-app payments system.
From August:
The law is an amendment to the Telecommunications Business Act that will prevent Apple and Google from requiring that developers use their own in-app payment methods on places like the iOS App Store and Google Play. The law also has provisions for preventing unreasonable delay to the approval of apps or deleting them from the marketplace so as to prevent retaliation. Failure to comply could mean massive fines for Apple, up to 3% of the company's total revenue in the country. It means developers will be able to process payments using methods other than Apple's in-app purchase methods, potentially depriving Apple of its commission on transactions, although the company has previously said it would still need to collect commission from developers even if they used other payment methods.
At the time of passing, Apple told us that the law would put users who buy goods from other sources at risk of fraud, undermining their privacy protections, make it more difficult to manage purchases, and make parental controls like 'Ask to Buy' less effective.
No details have been forthcoming about how Apple plans to comply or what exactly that might look like.
