Apple targets South Korea over new app store regulations

Apple Inc was on a collision course with South Korea on Friday over new demands that it stop forcing app developers to use its payment systems, with an official government warning of a possible investigation into iPhone manufacturer compliance.

The law went into effect last month, but Apple told the South Korean government it was already complying with it and did not need to change its app store policy, a Commission official said. Korean Communications (KCC) in charge of the case.

This development comes after South Korea amended the Telecommunication Business Act in August in an attempt to curb the market dominance of tech majors and prevent large app store operators such as Apple and Alphabet Inc Google from charging commissions on in-app purchases.

“This defeats the purpose of the amended law,” the official said, requesting anonymity as the KCC was still in talks with Apple over compliance.

Apple did not immediately respond to a request for comment.

The regulator would ask Apple’s South Korean unit for a new company policy giving greater autonomy in payment methods, and if Apple did not comply, would consider measures such as an investigation by investigation as a precursor to possible fines or other sanctions.

Google “Plans to comply”

Google had informed the KCC that it planned to comply with the law, including allowing third-party payment systems, and would discuss the matter with the regulator starting next week, the KCC official said.

Google did not immediately respond to a request for comment from Reuters. Jung Jong-chae, an antitrust lawyer, said Apple had more to lose than Google because of Korean regulations.

“The differences between Apple and Google in the willingness to give ground may be due to the fact that Apple controls everything from the hardware to the operating system (OS), including the application market and the payment system,” he said he declared. “And has more to lose if its dominance is broken on any front, which could lead to calls for openness on other fronts.”

In South Korea, the home market of Android phone maker Samsung Electronics, Google Play Store, reported sales of nearly 6 trillion won ($ 5.29 billion) in 2019, according to a government report released. Last year. Earlier this year, Google announced that it would reduce the service fees charged to developers on its app store from 30% to 15% on the first million dollars of revenue they earn in a year. Apple has taken similar steps.

For Apple, too, in-app purchase commissions are a key part of its $ 53.8 billion services business and a major expense for some app developers.

Summary of the news:

  • Apple targets South Korea over new app store regulations
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