Apple expands South Korean checkout options

Discussions between Apple and the Korean Communication Commission may soon bring relief to third-party app developers in the form of lower transaction fees and broader checkout options, reported TechCrunch journalist Kate Park.

Park's story, "Apple to allow third-party payment options in South Korea," published Jan. 11, 2022, suggests Apple may be easing restrictions on app developers in response to Korea's toughening stance against big tech, particularly with an August 2021 statute that disallows Google and Apple from restricting app store checkouts to their respective Google Pay and Apple Pay schemes.

"Apple has submitted its compliance plans to allow developers to use third-party payment options in South Korea at a reduced service fee, the Korea Communication Commission (KCC) said on Tuesday," Park wrote. "The KCC also said it would talk with Apple to iron out further details, including service fee structures and the exact date when the payment option will go into effect."

Park further noted that Apple is leveraging its market clout to defend its position by claiming that having an Apple store presence is helping tech startups gain influence, recognition and scale. Apple claims it has helped Korean developers access markets in nearly 200 countries, she added, but is working with the KCC and developer community toward a mutually beneficial solution.

Telecommunication Business Act

The Telecommunications Business Act, amended by the South Korean National Assembly on Aug. 31, 2021, disallows app market operators from forcing customers and vendors to use specific payment systems on mobile apps and provide more checkout choices. Deeming these restrictions unfair, the South Korean legislature stated the purpose of the amendment is to "promote fair competition among participants in the app market industry."

South Korean policymakers also mentioned that the Minister of Science, ICT and Future Planning and the KCC are jointly investigating the app market to identify disputes and any other activities that impede fair competition in the market. Disputes regarding payment, cancellations and refunds of usage fees are among the areas under scrutiny, the KCC stated. These measures are intended to prevent any regulatory actions from occurring that may unintentionally undermine community interests, they added.

In addition, the South Korean National Assembly suggested that app developers conduct their own surveys and submit their views on app market operations, to ensure that they will also have a voice and representation in app marketplace industry regulations and oversight.

Growing concerns

The Coalition for App Fairness, formed by Basecamp, Blix, Blockchain.com, Deezer, Epic Games, the European Publishers Council, Match Group, News Media Europe, Prepear, Protonmail, SkyDemon, Spotify, and Tile to protect consumer interests, compiled a list of guiding principles designed to help app developers navigate the increasingly complex and competitive app marketplace industry.

Following are the association's 10 App Store Principles:

1. No developer should be required to use an app store exclusively, or to use ancillary services of the app store owner, including payment systems, or to accept other supplementary obligations in order to have access to the app store.

2. No developer should be blocked from the platform or discriminated against based on a developer's business model, how it delivers content and services, or whether it competes in any way with the app store owner.

3. Every developer should have timely access to the same interoperability interfaces and technical information as the app store owner makes available to its own developers.

4. Every developer should always have access to app stores as long as its app meets fair, objective and nondiscriminatory standards for security, privacy, quality, content, and digital safety.

5. A developer's data should not be used to compete with the developer.

6. Every developer should always have the right to communicate directly with its users through its app for legitimate business purposes.

7. No app store owner or its platform should engage in self-preferencing its own apps or services, or interfere with users' choice of preferences or defaults.

8. No developer should be required to pay unfair, unreasonable or discriminatory fees or revenue shares, nor be required to sell within its app anything it doesn't wish to sell, as a condition to gain access to the app store.

9. No app store owner should prohibit third parties from offering competing app stores on the app store owner's platform, or discourage developers or consumers from using them.

10. All app stores will be transparent about their rules and policies and opportunities for promotion and marketing, apply these consistently and objectively, provide notice of changes, and make available a quick, simple and fair process to resolve disputes.

"The world's most popular online platforms and the app stores that govern access to them, have become a critical gateway to the consumers of digital products and services worldwide," CAF representatives wrote. "As regulators and legislatures around the world seek to address these important issues, the Coalition for App Fairness urges them to recognize that every app developer, regardless of size or the nature of their business, is entitled to compete in a fair marketplace and should be afforded [these] rights."

CAF representatives further noted that organizations of any size or industry that are committed to protecting consumer choice, fostering competition and creating a level playing field for all app and game developers globally are welcome to join the coalition. Additional information is available at appfairness.org/.

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