(Yonhap interview) South Korea’s new in-app payment law is “monumental”, CAF chief says

SEOUL, Nov. 16 (Yonhap) – The head of a US group that speaks on behalf of app developers has called “monumental” South Korea’s recent law banning Google Inc. and Apple Inc. from imposing their payment systems integrated with application developers.

The law came into effect in September, making South Korea the first country in the world to intervene to challenge the two US tech giants over issues of shopping through the app.

“It’s monumental,” Meghan DiMuzio, executive director of the Coalition for App Fairness, said Monday in an exclusive interview with Yonhap News Agency in Seoul.

South Korea “is the first country in the world to be able to pass a national law guaranteeing fairness and competition in the digital market.”

The Washington-based nonprofit, launched in September 2020, represents more than 60 members, including US video game giant Epic Games Inc. and Swedish music streaming company Spotify.

DiMuzio said Google and Apple – the two custodians of the App Store – control the majority of digital equity, but their policies have continuously raised antitrust and anti-competitive concerns.

Following the enactment of the law, Google pledged to provide an alternative payment system in its app store only in South Korea, offering the choice between a third-party payment system and its own integrated billing system.

Instead of charging a 30% commission for in-app purchases from app makers, developers who choose alternative payment systems can get a 4% commission reduction.

“We are very concerned because Google recently announced a compliance plan which is spurious,” said DiMuzio, expressing concern that the service fee is essentially not a savings.

Apple, meanwhile, has reportedly told South Korean lawmakers it is already in compliance with the law, although it has not provided any compliance.

“For too long, Apple, in particular, has not been held accountable and has continued to intimidate developers and policy makers as well as the general public,” she said.

Epic Games took Apple to US court last year for implementing an integrated purchasing system. The case is still before the courts.

“(Apple) is acting in its own best interests, not for competition and fairness,” she said, criticizing the tech giant’s refusal to come and discuss on behalf of developers and consumers.

In September, the iPhone maker rejected Epic Games’ request to have its hit title “Fortnite” re-released in South Korea in accordance with South Korean law that effectively allows alternative payment systems in South Korea. apps on app stores.

Epic’s “Fortnite” was pulled from Apple’s App Store last year after the game maker introduced its own direct payment system to bypass Apple’s commissions.

DiMuzio said the South Korean law is extremely important because it is not only recognized by US lawmakers and policymakers in countries like Japan and Australia, but also by the European Union, which is made up of 27 member states, who have taken similar action.

“There has been interest not only in the international community, but also a wider public debate is underway to help consumers and advance technological issues in the competitive market,” she said.

She also pointed out that such a law is not only beneficial for developers, but ultimately for consumers, as app developers can recoup the savings they have made through the law.

Match Group, one of the CAF members who acquired Hyperconnect, a South Korean video technology company, has pledged to invest in South Korea following the passage of the law.

“Hyperconnect has promised to invest in Korean workforce and further technological development,” she said, expressing hope that more developers will play a role in a more open and accessible market.

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Elaine R. Knight