The World's First Legal Regulation of App Markets
The Legislation and Judiciary Committee of the National Assembly passed an amendment to the Telecommunications Business Act on Aug. 25. The bill is to prevent forced in-app payment in app markets. Once the National Assembly adopts the bill at the next regular session, it will become the first case in the world where forced in-app payment is prohibited by law.
The legislation dates back to July last year, when Google announced that it would expand mandatory in-app payment from mobile game apps to every Google Play app and impose a 30 percent fee. At that time, Apple was already doing so.
The announcement backfired, and the forced in-app payment was defined by many as an abuse of market dominance. Google Play currently accounts for more than 70 percent of the domestic app market and the ratio of Google and Apple in the market amounts to 85 percent or so. The South Korean government initiated its probe and both the ruling and opposition parties came up with bills to counter the measure.
Then, Google postponed the implementation of the measure from January this year to October this year. Last month, it re-postponed the date to April next year for certain businesses. In addition, it said that the fee would be 15 percent for app businesses with annual sales of US$1 million or less and digital content app businesses. Nonetheless, criticisms did not subside and the Science, ICT, Broadcasting, and Communications Committee of the National Assembly passed the bill last month.
Countries around the world are watching the bill that is the first legal regulation of app markets. How the U.S. government will respond on the international trade side is drawing much attention, too. A bill for the same purpose has been tabled in the U.S. Senate and 36 U.S. states and Washington D.C. are in antitrust litigation against Google. In June, the United Kingdom and Germany initiated their investigations in relation to forced in-app payment.