South Korea was the first country in the world to introduce a law requiring Google and Apple to accept third-party payment services on the Play Store and App Store. Since then, the two American giants have been testing the limits of the text. On April 5, the Korea Communications Commission (KCC) imposed a snub in Mountain View.
The KCC imposes a broad interpretation of the law
In a legal notice, the KCC took over Google for threatening app developers practicing “outlinking”. As its name suggests, it involves installing an external link on its service to a website, where an alternative payment system is offered to the user. Ideal for avoiding Play Store and App Store commissions that can climb up to 30%.
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Inevitably, the practice appeals much less to Apple and Google. The latter has therefore decided, in South Korea, to block, from April, updates to applications that have made the mistake of engaging in outlinking. Without correction from the developers, the permanent exclusion from the Google application store was set by the company for June 1.
For the KCC, this is a violation of the law on the opening of applications which entered into force in South Korea in September 2021. Good news for developers, because the case was not won in advance. . Google has tried to take advantage of the gray areas of the legislation.
The Korean law, the latest details of which were published in March 2022, simply specifies that it is prohibited for app stores to impose their own payment methods, preventing or hindering third-party systems. Google saw a gap there: the outlinking leading the user to a third-party system, it is not strictly speaking covered by the text.
Missed. The KCC decided to choose a more extensive interpretation of the text. Han Sang-Hyuk, Chairman of the Commission, explained in a statement, “ We will strive to ensure that regulation lives up to its intentions to ensure user choice “. If Google persists in this way, it faces a fine of up to 2% of its turnover.
The KCC took advantage of the publication of its legal opinion to indicate the opening of a “Reporting center for victims of market abuse of applications”. A group of experts will be tasked with collecting and investigating complaints from developers about app stores. He must start his activities during the month.
Google and Apple ready to fight while showing their good will
Despite the search for flaws illustrated by this case, the wall street journal reports that Google and Apple are trying to come into compliance. The first is probably the most scrutinized. It masters the South Korean market, thanks to the domination of the local giant Samsung. The firm’s smartphones, running on Android, represent 72% of devices in the country against 21% for Apple, according to the research firm Counterpoint Research.
Google has already allowed alternative in-app payment systems. However, the giant still applies its commission, reduced by 4%. According to the KCC, Apple has not yet changed its internal policy, but intends to do so.
The two giants have proven that he knows how to adapt. Worldwide, commissions have been lowered, from 30% to 15% for the majority of applications, sometimes less. Following a decision by the Japanese antitrust, Apple has decided to authorize outlinking everywhere for reading applications (Netflix, Spotify, ebook, etc.). Google, meanwhile, unveiled a partnership with Spotify for the implementation of a third-party payment system.
The contortions of Apple and Google to defend the slightest bit of their interests foreshadow the future legal battle that is looming in Europe and the United States. On both sides of the Atlantic, texts are being discussed for the opening of application stores. The Digital Markets Act, on the Old Continent, is even very close to completion. Europe has been warned, this will only be a first step.