Apple and Google's ability to take a cut of every app purchase is in peril due to a new South Korean bill
- A new bill in South Korea forces Apple and Google to allow alternate payment options on their smartphone stores.
- Both companies have come under increasing scrutiny for how payment works on their app storefronts.
- The issue came to a head last year when "Fortnite" maker Epic Games sued Apple.
Apple and Google are the target of a new South Korean bill that intends to open the smartphone platforms to alternate payment options.
South Korea's parliament on Tuesday approved a bill that bans major app store operators such as Google and Apple from forcing software developers to use their payment systems, effectively stopping them from charging commissions on in-app purchases.
The bill, which is expected to be signed into law by President Moon Jae-in, would impose a fine on the companies for not complying: 3% of their total revenue from South Korea.
It is the first such curb by a major economy on the likes of Apple and Google, which face global criticism for requiring the use of proprietary payment systems that charge commissions of up to 30%.
Major app makers, from Spotify to Tinder, have publicly criticized the use of proprietary payment systems by Apple and Google. Epic Games, the maker of "Fortnite," went so far as to create its own payment system. The game was promptly kicked off Apple's App Store, which resulted in Epic suing Apple.
Both Apple and Google rebuked the bill in statements to The Verge.
Allowing alternate payment options on the iPhone will, "put users who purchase digital goods from other sources at risk of fraud, undermine their privacy protections, [and] make it difficult to manage their purchases," Apple's statement said, an echo of arguments its lawyers made during the trial with Epic Games.
Google argued in its statement that its app store cut is a measure of offsetting the cost of creating and maintaining Android, Google's smartphone operating system. "Just as it costs developers money to build an app," the statement said, "it costs us money to build and maintain an operating system and app store."
The final vote in South Korean parliament was 180 in favor out of 188 attending to pass the amendment to the Telecommunications Business Act, dubbed the "Anti-Google law."
Reporting by Heekyong Yang; Editing by Simon Cameron-Moore
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