What you need to know
- South Korea has delayed a vote on the Telecommunications Business Act.
- The law is expected to pass due to the "ruling party's super-majority."
- If passed, Apple would need to allow third-party payment processing in the App Store.
South Korea has delayed the parliamentary vote on what could be the biggest hit to the App Store and Google Play Store since their invention.
The Telecommunications Business Act, which was approved by a committee last week, would end Apple and Google's ability to force developers to use its own in-app payment processing systems. The legislation would require both companies to allow developers to offer payment providers of their own choice, putting at stake the upwards of 30% fees the companies currently charge in their respective app stores.
As reported by Bloomberg, the vote was delayed by other legislation and will be rescheduled for a future session.
Now, Korea's government is taking direct action to end that dominance. The Telecommunications Business Act would mandate giving users a free choice of app payment providers. The bill, which is almost certain to pass an assembly vote given the ruling party's super-majority, opens the door for companies like Fortnite maker Epic Games Inc. to transact directly with users and bypass the platform owner's charges. Epic has taken the iOS and Android owners to court in various jurisdictions arguing their fees are unfair.The bill, originally slated for a vote Monday, was delayed by other legislation and will now go before lawmakers at a future plenary session to be determined.
Omdia analyst Guillermo Escofet said that, if the legislation passes, it could initiate a wave of similar laws around the world, including the United States and Europe.
"This could presage similar actions elsewhere. Regulators, lawmakers and litigators in North America and Europe are also scrutinizing app-store billing rules, and the overriding political mood has become hostile to the enormous amount of power concentrated in the hands of the tech giants."
Apple has pushed back fiercely against the legislation, saying that its own processing is needed in order to protect " parental controls, privacy and trust."
