Google and Apple revenues under threat: companies are going to be banned from charging commissions from software developers in South Korea

A South Korean parliamentary committee voted Wednesday to recommend amendments to a law that could prohibit Google and Apple from enforcing fees on software developers. If the amendments are adopted, it will be the first such restriction on the part of a large economy and could hit these companies hard. And other countries may follow South Korea.

Apple and Alphabet have long been criticized for their policy of requiring software developers using their app stores to use only proprietary payment systems that charge fees up to 30%.

Apple said the new law “would expose users who buy digital goods from other sources to the risk of fraud, undermine their privacy protections,” undermine user confidence in App Store purchases and reduce opportunities for South Korean developers. Wilson White, Google’s senior director of public policy, said the company had failed to sufficiently analyze the negative impact of the law on Korean consumers and app developers.

“Google and Apple are not the only ones who can create a secure payment system,” said Lee Hwan, a professor of competition law at Korea University.

The proposed amendments prohibit Google and Apple, which have a dominant market position, from imposing payment systems on content providers and “improperly” postponing the review or removal of mobile content. The law also allows the South Korean government to protect the rights and interests of users, vet app market operators, and resolve payment, cancellation or refund disputes in the app market.

Following the approval of amendments to the law, dubbed “Law against Google”, these changes are submitted to a final vote in parliament on August 30.