Tech giant Google said on Thursday that it plans to allow third-party payment systems in South Korea, in compliance with a new law that bans major app store operators—Google Play Store and Apple App Store—from compelling software developers to use their payment systems.
The ban is the first of its kind by a major economy on the likes of Apple and Google, which faced global criticism for mandating the use of their payment systems that charge commissions of up to 30 percent.
In August this year, a South Korean parliamentary committee passed an amendment to South Korea’s Telecommunications Business Act —dubbed the “anti-Google law”, banning big app stores from forcing developers to use their payment systems, effectively putting a stop to the commissions they charge on in-app purchases. Following the enactment of the new law, most of which went into effect in September, the country’s regulatory body—Korea’s Communication Commission, requested that Google turn in compliance plans for the new law. The response is Google’s latest announcement.
Speaking on the latest development, Google said: “We respect the decision of the (South Korean) National Assembly, and we are sharing some changes to respond to this new law, including giving developers that sell in-app digital goods and services the option to add an alternative in-app billing system alongside Google Play’s billing system for their users in South Korea.”
Korea’s Communication Commission said that Google has proposed plans which will allow alternative payment systems at lower fees. These plans will be implemented this year and would only apply to South Korea. “We were able to confirm Google’s determination to comply with the law, and I hope (Google) will implement this policy change in a way to reflect the legislative purpose of the revised law,” said Han Sang-hyuk, the Chairman of Korea’s Communication Commission. Google, however, said that alternative billing systems may not offer the same protections or payment options and features of Google Play’s billing system.
Google, which charges developers a 15 percent service fee for distributing apps, said it will reduce this to 11 percent when users choose an alternative billing system. And according to Korea’s Communication Commission, Google will implement the new payment policy before the year runs out.
While Google has made accommodations for the new law, Apple is yet to announce any changes.