Apple, Google no longer in power as fairness is brought to digital economy

South Korea is the first country to challenge app store payment policies, with a new bill introduced to support content developers.

Google and Apple are now facing criticism for their app store and payment policies across the Asia Pacific.

Currently, app developers are forced to use the proprietary billing systems of the respective tech giants’, however South Korea is challenging this rule.

Under a new bill passed on Tuesday by South Korean parliament, app makers can use external companies to process payments on their apps in Google Play and Apple’s App store.

The country will be the first to challenge Google and Apple’s payment policies, once the bill is signed by President Moon Jae-in.

This comes a week after Apple said it would allow App Store developers to promote alternative payment methods to their user.

Current policies “unfair”

Critics said the current Google and Apple payment legislations were unfair, as the monopolies were entitled to a 30 percent commission.

They also said, developers were left with little choice and had to coincide with the conditions or face not receiving payment and delayed app reviews.

Meghan DiMuzio, the head of the Coalition for App Fairness, welcomes the bill coined the “Google power-abuse-prevention law” with open arms.

“[The law] is a significant development in the global fight to bring fairness to the digital economy,” DiMuzio says.

Apple and Google react

However, in response to the bill, Apple says choice of third-party payment systems may put users at risk of exposure to fraud.

“Users who purchase digital goods…undermine their privacy protections, make it difficult to manage their purchases and features like ‘Ask to Buy’ and Parental Controls will become less effective,” an Apple spokesperson says.

Google also commented on the bill saying its payment system is what helps keep its service fee “free”.

“We’ll reflect on how to comply with this law while maintaining a model that supports a high-quality operating system and app store, and we will share more in the coming weeks.”

Australia follows suit

Australia is also ramping up the pressure by floating reforms for how to tackle payment systems provided by Apple and Google.

Apple’s commissions, can go as high as 30 percent on some purchases made through the company’s platform, with some companies saying they have little choice to comply.

Australian Treasurer Josh Frydenberg has called for new regulations on digital payments.

“Ultimately, if we do nothing to reform the current framework, it will be Silicon Valley alone that determines the future of our payments system.”

Treasurer Josh Frydenberg, the Australian Financial Review newspaper.

The Australian government is considering designating tech companies as payment providers while establishing a strategic plan between the government and the industry.

As a result, an integrated licensing framework will be developed for payment systems.

Written by Rebecca Borg