Google will add third-party payment systems to its app store in South Korea
In what’s a first for the company, Google LLC said today it will open up alternative in-app payments in South Korea.
The move is not one that Google preferred to make, but South Korea put its foot down and forced the company to adhere to a new law. South Korea might be the first country to ask this of Google, but other countries might follow suit.
“Service fees for distributing apps via Android and Google Play will continue to be based on digital sales on the platform,” Google explained in a blog post. “We recognize, however, that developers will incur costs to support their billing system, so when a user selects alternative billing, we will reduce the developer’s service fee by 4%.”
The new law was passed in late August, designed to stop companies such as Google and Apple Inc. from taking such high commissions. Notably, at the time of the introduction of the bill, the media in South Korea media called it the “Google power-abuse-prevention law.”
And what about Apple? According to the Wall Street Journal, Apple believes its policies already adhere to the law. The Journal explained that this might be because the law states that companies can’t charge “unreasonable fees” and perhaps Apple believes its fees meet this standard. The South Korean government may have something to say about that in the near future.
“We believe user trust in App Store purchases will decrease as a result of this proposal, leading to fewer opportunities for the over 482,000 registered developers in Korea who have earned more than KRW8.55 trillion to date with Apple,” Apple said when the bill was first passed. It’s a trend that could expand, though.
In the U.S., Apple has come under some severe criticism for its payment system, leading to a court battle between itself and some apps, notably Epic Games Ltd., the creators of the game “Fortnite.” Spotify Technology SA has also been in a tangle with Apple over what the music app says is unfair business practices by the company. Just yesterday, Meta Platforms Inc. announced an alternative payment system for its creators on the Facebook platform. It’s likely only a matter of time before changes are made in line with what just happened in Korea.
Photo: Yuri Samoilov/Flickr
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