Big changes are coming to Apple and Google payment systems in South Korea as a new law turns things upside down.
South Korea is bringing reversals to mobile transaction information systems after a few days ago it approved detailed rules for a law that prohibits large app store companies, including Apple Inc. and Google of Alphabet Inc., from forcing software developers to use their own payment systems.
This is contained in a recent report by the country’s telecoms regulator. South Korea passed the law last year as an amendment to the Telecommunications Business Act.
It is the first time that such a large country with a strong economy has imposed such restrictions on Apple and Google. Both companies have faced global criticism for requiring developers to use their proprietary payment systems that make a commission withhold up to 30%.
These new rules will enter into force on 15 March. The regulator, the Korea Communications Commission (KCC), said in a statement that it made it clear that the law prohibits “the act of forcing certain payment methods on mobile content providers” by unfairly exploiting the position of app market providers.
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Han Sang-hyuk, president of the KCC, said: “In order to prevent indirect circumvention of regulations, the types and standards of prohibited conduct have been determined as close as possible within the scope allowed by law.”
Prohibited behavior includes unfair delays by app market operators, censorship of mobile content, denial, restriction, deletion, blocking of registration.
The regulations say that the potential fines for non-compliance will be up to 2% of each company’s average annual revenue!