South Korea is “likely” to bar Apple and Google from requiring software developers to use their payment systems, “effectively stopping them from charging commissions on in-app purchases,” reports Reuters.
The article says the government is “expected on Tuesday” to approve an amendment to the Telecommunications Business Act. If approved it will be put to a final vote on Wednesday
This isn’t Apple’s first issues with the South Korean government. Apple Korea has been criticized by local mobile carriers for passing the costs for smartphone sales — including advertising costs, launch events and repair costs — to them. The FTC has reviewed details of the U.S. firm’s contracts with South Korean mobile telecoms carriers. The commission is South Korea’s regulatory authority for economic competition.
In the past, the FTC said it would review detailed corrective measures crafted by Apple Korea and decide whether to approve them. Under South Korean law, an applicant is required to state a correction scheme necessary to restore competition practices or to improve business practices, and to remedy or prevent damage to consumers and other business entities.
The South Korean government also has (or at least had) plans to impose taxes on Apple, Amazon, Google, and other global IT companies following growing criticism that the firms earn billions of dollars in sales there annually but pay no taxes. Under current corporate law, the government doesn’t tax global companies as they don’t have to pay taxes unless they have fixed places of business in the country.
In a statement to Reuters, Apple said the amendment “will put users who purchase digital goods from other sources at risk of fraud, undermine their privacy protections, make it difficult to manage their purchases.”