Unsatisfied with Apple’s compliance plan on alternative payments system on iOS, the South Korean regulator says the tech needs to provide more details.
In late 2020, South Korea passed a historic law, an amendment to the Telecommunication Business Act, that prohibited Apple and Google from forcing developers to use their payment systems on iOS and Android platforms, respectively, and allowed developers to offer alternative payment methods to consumers.
However, the rules of the law, called the enforcement ordinance, will be finalized by March 15, 2022, and South Korean regulators want Apple and Google to submit more comprehensive plans before that.
South Korean regulators seek more detailed plans from Apple and Google to finalize the rules of the new law by March
After some delay, Apple finally agreed to comply with the new South Korean law and shared its plan with the Korea Communications Commission (KCC) regarding its introduction of alternative payment systems in January 2022.
But the KCC officials are not satisfied with the submission. An anonymous KCC official told Reuters that Apple’s plan “still lacks concrete detail” and the regulatory authority is in contact with the tech giant’s representatives “for a more detailed compliance plan that goes beyond the general intention of allowing alternative payment systems.”
The KCC official also added that Google needs to provide additional information on the reduction of its service fee by 4%. In its alternative billing system on Android and Play Store plan, Google explained that it will reduce developers’ service fee by 4% and did not waive its commission completely. For example, “the vast majority of developers who pay 15% for transactions through Google Play’s billing system, their service fee for transactions through the alternate billing system would be 11%.”
KCC says that it needs more comprehensive plans from Apple and Google because any policy which discourages the use of alternative payment systems on iOS and Android will likely diminish the purpose of the new regulatory law.
“As a result of any policy, if app developers find it realistically difficult to use an alternative payment system and resort to using the dominant app store operator’s payment system, it would not fit the law’s purpose,” the official said, adding that this stance would likely be reflected in the final ordinance. Reuters
As simple as it sounds to offer alternative payment systems outside App Store and Play Store, it might not be for most small developers, who will have to invest in creating a separate online store or website with a payment system and release regular updates with performance improvements and bug fixes. Currently, developers pay Apple for using its payment system in the form of 15% – 30% commission for in-app purchases.