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South Korea passes legislation to rein in Google and Apple

News coming from South Korea will not be liked by Google and Apple, the predominant app market players in the mobile phone market. South Korean parliament has passed a new legislation that seeks to allow app developers to use 3rd party payment processors for in-app digital purchases. The legislation requires an asset from the South Korean President to become binding law for the country.

180 out of the 188 presiding members of the South Korean Parliament voted in favor of amending the South Korean Telecommunications Business Act. As part of the amendment, app developers cannot be forced bound to the payment processing systems of Google and Apple. Both companies have had systems in place wherein all the digital in-app payment processing takes place through Google or Appleā€™s payment processing systems. In lieu of providing payment processing systems, both companies make up to 30% commissions on the digital sales.

If the developers are allowed access to 3rd party payment processors, the commissions payable on payment processing will go down massively. This will be positive for the app development efforts of the developers.

On their part, both companies have suggested that they will scale back the commissions collected from small app developers to 15%, provided the app developers have less than $1 million app or digital sales.

The worry for Apple and Google is that Australia and the European Union are also looking into ways to rein in the digital commerce and Internet industry. Whether this law amendment from South Korea can inspire other countries to follow suite? This is question that does not have many answers. But, the die seems to have cast to moving towards times of more control on the Internet giants.