What you need to know
- New South Korean legislation could change the face of Apple's App Store forever.
- The country is likely to pass a law that would ban Apple from making developers use its in-app purchases system.
- It could stop Apple from taking a cut of transactions on its platform.
South Korea is "likely" to pass a law that would stop Apple and Google from making developers use their respective in-app payment systems, cutting them off from a key revenue stream in a huge upset to their ecosystems.
Reuters reports that the country is "expected on Tuesday" to approve an amendment to the Telecommunications Business Act, colloquially known as the "Anti-Google law". If approved it will be put to a final vote on Wednesday. The legislation could be cataclysmic for Apple's App Store, as it would effectively prevent Apple from taking a 30% (or 15%) cut of transactions made on its App Store for digital goods, as developers would be allowed to use other payment systems beyond in-app purchases.
The measure is one of the core arguments at the heart of Apple's fight with Epic Games, the Fortnite-maker claiming that developers should be allowed to choose how they let customers pay for their digital goods. Currently, App Store developers must use in-app purchases, of which Apple takes a cut, either 15% or 30% depending on how much the developer earns.
The legislation is similar to emerging bills in both the EU and the US, which have emerged following increased scrutiny of Apple, Google, and their respective App marketplaces.
The move is not likely to go unchallenged by Apple. In court during the Epic Games trial, Tim Cook stated that if developers were allowed to use alternative methods of payment on its App Store the company would still collect commission on those transactions, or at least that it would try to. From our May report
Legislation passing in South Korea would mark the first time a government has successfully legislated against antitrust allegations leveled at Apple and could prompt a wave of similar measures in other countries. The news will be an unwelcome distraction for the company as it prepares for the launch of iPhone 13 next month, which is shaping up to be the best iPhone the company has ever made.
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.
Complicated issue. Imagine if you built a grocery store in your neighborhood. You built the building and maintained it. You payed for security, utilities, employees to keep it stocked and clean, and cashiers. Now the government says anyone can come into your store and set up a table and sell their honey, bread, homemade beer, whatever, and you, the store owner can't take a cut. Oh, and you are required to provide them space; you can't say they can't sell out of your store. BTW, since they are selling out of your store, you are still responsible for what they sell. Fair, right?
I totally agree with you, what problem are they trying to fix here?
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