Apple Submits Alternative Payment System In South Korea

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App Store compliance move as Apple reportedly submits plan for alternative payment system in South Korea to comply with new law

Apple has reportedly submitted plans to allow third party payment systems on its App Store, but only in South Korea.

South Korea’s telecommunications regulator was quoted by Reuters as saying on Tuesday that Apple had submitted plans to allow third-party payment systems on its App Store to comply with a law banning major app store operators from forcing software developers to use their payments systems.

This is because last August South Korea became the first major economy in the world to effectively stop Apple and Google from charging commissions on in-app purchases.

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South Korea law

This was because South Korea’s parliament approved the amended ‘Telecommunications Business Act’ (also known as the anti-Google law).

This stopped Google and Apple from forcibly charging software developers up to a 30 percent commissions on in-app purchases

The legislation went into effect on 15 September, and the Korea Communications Commission’s (KCC) requested that Google and Apple come up with compliance plans for the new law.

Google submitted its compliance plan in early November, but Apple delayed submitting its plan, prompting warnings of an official investigation in that country.

This law comes after years of complaints from the developer community about the up to 30 percent tariff that Apple and Google impose on in-store or in-app payments.

Apple compliance?

Now Reuters has reported that the Korea Communications Commission (KCC) as saying that Apple has now also submitted its plans.

“We look forward to working with the KCC and our developer community on a solution that benefits our Korean users,” Apple was quoted as saying in a statement.

The iPhone giant however did not provide details such as timeline of when the new payment systems will take effect, or commission fee rates it will charge.

Apple reportedly plans to discuss further details with the KCC, the regulator said.

The KCC said Apple plans to allow alternative payment systems for a lower service fee versus the current 30 percent commissions.

Apple said it paid developers a total of $260 billion through its App Store since its launch in 2008, implying a $60 billion payout to developers in 2021.

Epic lawsuit

The complaints about Google’s and Apple’s commission charges was evidenced most recently by the legal action between Apple and Epic Games, the developer of the game Fornite.

Epic had sued Apple when it tried to get around Apple’s 30 percent fee on in-app purchases by launching an in-app payment system of its own.

Apple then kicked off Fortnite from its App Store.

In September US district Judge Yvonne Gonzalez Rogers effectively ruled in Apple’s favour, siding with the iPhone maker in nine of the ten claims Epic brought against the company.

However there was one ruling that did not go Apple’s way, and ordered Apple to make a major change to its App Store, for the first time allowing developers to send their users to alternative payment systems.

Apple was ordered to no longer prohibit app developers from including buttons or links in their apps that will direct users to means of paying beside Apple’s in-app payment system, which charges a commission to developers.