Eyes on Apple after Google changes in-app payment policy in Korea

After Google’s move to allow a free choice of payment options for digital purchases made on its app store in South Korea, attention is turning to Apple, the other global tech giant targeted by a new law here.

As of Friday, Apple remained silent on how it plans to comply with the law, which was passed by the National Assembly in August as the world’s first aimed at curbing the dominance of Google and Apple in the app ecosystem.

On Thursday, the Korea Communications Commission said its Chairman Han Sang-hyuk and Google’s senior director Wilson White held an online meeting in which they discussed Google’s plan to bring its app store policy in line with the new law.

The KCC noted the meeting was held at Google’s request to explain the details of changes in its in-app payment policy, before the US tech giant officially submits its new proposal.

“We respect the decision of the National Assembly, and we are sharing some changes to respond to this new law,” White also wrote on the company’s Google Developers blog Thursday.

White said Google would give developers “the option to add an alternative in-app billing system alongside Google Play’s billing system for their users in Korea.”

Also, Google will cut 4 percent from the 15 percent commission if developers choose to use an alternative payment system. Previously, Google charged developers a 15 percent fee for distributing apps on its app store.

Google, however, noted third-party billing systems may not offer the same security measures or payment options that Google Play’s billing system will provide.

According to the KCC, Google’s plan for policy changes could take place as early as this year. The commission added Google’s new policy would only be applied in South Korea.

Google’s decision adds to the pressure on Apple, the other major app store operator.

While it remained silent on the in-app payment policy, it was reported Thursday that Apple’s Korea unit chief Brandon Yoon was resigning from his position.

In October, Apple told the KCC that its policy already complied with the new law, and there was no need to make changes.

The state-led commission, however, dismissed Apple’s argument, demanding the company submit an alternative plan. If Apple failed to respond, the company could face punitive measures, including a fact-finding investigation and fines.

In August, the National Assembly here passed an amendment to South Korea’s Telecommunications Business Act, which bans big app store operators, such as Google and Apple, from prohibiting developers to use alternative payment systems.

In September, Google and Apple submitted initial proposals, but they were turned down and the KCC ordered them to submit new plans.

By Shim Woo-hyun (ws@heraldcorp.com)