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South Korea Approves New IAP Law

Posted September 1, 2021 | Android | Antitrust | Apple | Google | iOS | Mobile | Windows

As expected, South Korea has approved the Telecommunications Business Act, which will require Apple and Google to offer third-party payment methods to developers. Of all the regulatory action we’ve seen against these firms so far, this marks only the second time that substantive changes will be required of this mobile duopoly. And yet, it’s not hard to imagine how each will be able to stall and work around the requirement.

To be clear—and I have to be, since so many readers clearly misunderstand the issue and what’s happening here—this change will not impact end-users, at least not directly, in the slightest. And any changes that do occur because of this change will only have positive results, for users and for developers.

Forcing Apple, Google, and others to allow third-party payment systems hits at only one of these firms’ many abuses, but it’s important to chip away at their dominance where possible so that the other abuses can likewise fall in the future. The problem, of course, is that Apple and Google will be able to work around this requirement. The most obvious way would be to support third-party payment systems only in South Korea, which would be a burden to developers and not Apple, and could lead to some developers just not offering apps there. That seems like the obvious move.

(The first major change to Apple’s and Google’s dominance came last summer when both firms dropped the fees for developers that make less than $1 million per year to just 15 percent, from 30 percent. This change impacts most developers, of course, and so it was a smart PR move that doesn’t impact Apple’s revenues in the slightest.)

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