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South Korea passes law that will mandate alternative iOS App Store payments

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How to use widgets on your iPhone Home screen (Image credit: Joseph Keller / iMore)

What you need to know

  • South Korea has passed a law that will mandate alternative payments on iOS.
  • The country is set to ban a requirement that developers use in-app payment systems.
  • It could mean enormous changes to the App Store in the country.

South Korea's National Assembly has passed a law that will force Apple to let developers use alternative payment methods on its iOS App Store, on a momentous day in the global antitrust battle.

WSJ reports:

Google and Apple Inc. will have to open their app stores to alternative payment systems in South Korea, threatening their lucrative commissions on digital sales.A bill passed Tuesday by South Korea's National Assembly is the first in the world to dent the tech giants' dominance over how apps on their platforms sell their digital goods. It will become law once signed by President Moon Jae-in, whose party strongly endorsed the legislation.

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 approval of apps or deleting them from the marketplace so as to prevent retalation. 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.

In an official statement from Apple provided to iMore the company stated:

"The proposed Telecommunications Business Act will put users who purchase digital goods from other sources at risk of fraud, undermine their privacy protections, make it difficult to manage their purchases, and features like "Ask to Buy" and Parental Controls will become less effective. 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."

The statement matches previous ones issued by the company in response to the legislation prior to its approval. The law passed in South Korea addresses at least one of the points of contention raised by Epic Games in its lawsuit against Apple in the U.S. and other countries. Epic Games CEO Tim Sweeney hailed the move stating "Korea is first in open platforms!":

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The move is a huge announcement with just weeks to go before Apple announces iPhone 13, which reports indicate will be the company's best iPhone to date.

Stephen Warwick
News Editor

Stephen Warwick has written about Apple for five years at iMore and previously elsewhere. He covers all of iMore's latest breaking news regarding all of Apple's products and services, both hardware and software. Stephen has interviewed industry experts in a range of fields including finance, litigation, security, and more. He also specializes in curating and reviewing audio hardware and has experience beyond journalism in sound engineering, production, and design.

Before becoming a writer Stephen studied Ancient History at University and also worked at Apple for more than two years. Stephen is also a host on the iMore show, a weekly podcast recorded live that discusses the latest in breaking Apple news, as well as featuring fun trivia about all things Apple.

2 Comments
  • Great article! I love how Apple tries to say that allowing people to pay developers directly is dangerous. What’s funny is that I use my credit cards to purchase things directly from restaurants, gas stations, grocery stores, Amazon and more without Apple getting 15% to 30% and I have had no issues. 85% to 95% I make these purchases using the Apps for these companies that I downloaded from Apple’s App Store. Additionally, how many stories have we heard about kids racking up thousands of dollars of In-App Purchases on their parents accounts or on their parents devices? It surprises me how often this has happened, especially since Apple does have safety measures in place to prevent kids from doing this, parents just need to set them up. I think that it would be less likely to happen though, if say every time you made an In-App purchase, you had to enter your CVC Code. Kids usually don’t have those. These are just my personal viewpoints, take them or leave them. Thanks again for the article!
  • If not at the tail end Apple will likely charge developers at the front end with developer licensing fees for iOS, certifications, WWDC, etc. Developers are unlikely to be getting a free ride on the platform. Apple could also refuse to cover damages caused by apps from third party app stores in AppleCare discouraging their use.