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ADIF commends South Korea for leading by example in tackling abuse of dominance by Apple and Google, urges similar legislative reforms in India to ensure fairer app economy
Posted on March 11, 2022
ADIF commends South Korea’s efforts to build a fairer app economy by curbing anti-competitive and restrictive practices by app store operators who enjoy a dominant position in the market. The country has taken a major step to curtail the monopolistic practices of Apple and Google – mostly mandating their own payment systems that charge commissions of up to 30% for publishing apps on their marketplace.
There has been a global backlash against Apple and Google over their mandatory high commission on digital assets, and antitrust watchdogs around the world are investigating their abusive practices. South Korea, however, was the first to set foot on the ground by passing a law to reign over these global giants.
Also in India, the Indian Competition Commission (ICC) has investigated Google and Apple for their abuse of power. However, the fact that Apple blatantly ignored the order of the main Dutch competition regulator and instead chose to pay fines rather than do anything to change its policies, underlines the urgent need and the importance of legislative reforms.
In August 2021, South Korea’s National Assembly amended the Telecommunications Business Law to prohibit dominant app store operators from coercing developers to use their proprietary payment systems. On March 8, 2022, authorities issued a detailed set of rules titled the “Enforcement Order” on the same legislation – which is expected to come into force on March 15, 2022.
The rules state that the law prohibits “the act of imposing a specific payment method on a mobile content provider.” The rules also prohibit actions such as unfairly delaying the review of mobile content, as well as denying, delaying or limiting the registration, renewal or inspection of content that uses third-party payment systems. Failure to comply with the law could cost store operators fines of up to 2% of the average annual income from related business activities.
Sijo Kuruvilla George, Executive Director of ADIF, said, “ADIF welcomes this decision and believes it is an important step towards creating a level playing field for startup communities and of developers. We also hope that this will set the right precedent that will be followed in the future by other countries seeking to build a competitive app economy.