Google and Apple are being made to allow alternative payment options on their platforms in South Korea, The Wall Street Journal reports.
This follows as another major step in the discussion around payment monopolies on mobile platforms like the App Store, where platform owners like Apple get a 30% cut of every sale.
According to the Wall Street Journal, South Korea has revised its Telecommunications Business Act to make it so that platform owners can no longer mandate using their payment systems, therefore incurring their 30% cuts.
Similarly, the bill will also make it so companies cannot “unreasonably delay” games release, seemingly as a retaliatory action, though the article doesn’t go into specifics how it plans to do this.
According to industry analyst Danial Ahmad, the move would be a net positive for South Korea:
This is a huge first step towards more open mobile platforms and will no doubt accelerate similar conversations taking place in other countries.
Still a lot of questions about how this will be implemented and what moves Apple / Google will take. https://t.co/vZ1C0375iD
— Daniel Ahmad (@ZhugeEX) August 31, 2021
“The movement against Google and Apple in Korea started not only to prevent monopoly by big tech firms but also to protect domestic companies’ interests. Korean companies such as as Naver and Kakao have been putting a lot of effort to establish their own payment system”, he says.
Companies have argued out against the practice before, saying maintaining one set of payment systems would be best for the users. However, Ahmad mentions:
“While there will certainly be concerns over privacy and fraud, primarily raised by Apple and Google, it’s worth noting that these walled gardens do not exist on Mac OS and Windows where any payment processor can be used and these concerns are minor”, he writes.
The Long And Short of Alternative Payment Options
What Ahmad is saying is simple- if you extend Apple and Google’s logic, Microsoft should make it so you can only buy things through the Windows store on PC, instead of allowing you to download Steam, or pay for things online. When you buy something on Amazon, for example, Microsoft or Apple don’t take a cut from these sales. Considering the much higher security risks on PC,the logical conclusion would be letting Microsoft or Apple process your payments- but they don’t, weakening the arguments for doing so on mobile with Google and Apple.
The Growing Trend
This news comes not one week after a court in the US ruled against Apple in a class-action lawsuit, saying Apple would have to allow users to opt-in to using alternative payment options.
With South Korea as one of the largest mobile markets in the world (just behind Japan), it’s hard to not see this trend coming to other countries as well.