Apple, Google app shops face new regulation as South Korea readies cost regulation
Regulators increasingly want to confront tech giants.
Apple; Illustration by Stephen Shankland / CNET
Apple and Google are under increasing pressure from global regulators who say the two tech giants have abused their power over mobile devices to take control of app developers and increase their profits in the process.
On Tuesday, the South Korean National Assembly passed a law forcing Apple and Google to relax the restrictions they are imposing on the Apple App Store and Google Play Store. The bill, which comes into force when the country’s president signs it, prevents app store operators from inappropriately delaying the approval of apps or deleting approved ones. It also states that app markets cannot require their in-app purchase systems to be used, giving developers the option to choose alternatives or create their own.
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South Korea’s moves are the latest in a campaign by regulators and lawmakers to set boundaries for the tech industry. After decades of growing tech companies with little oversight, governments have begun to grapple with itspread it on social media. The technology industry has also faced a relentless barrage of complaints about abuse of privacy and cumbersome business practices.
The South Korean bill focuses on in-app purchases, an issue that has caught the attention of other lawmakers and regulators. Apple and Google have tight controls and require that additional purchases made within an app be processed by them. The companies argue that in-app payment systems help control fraud while also helping app development. In turn, Apple and Google have argued that app developers get an easy way to top up subscriptions or digital items like fashion accessories for avatars in games.
“Just as it costs developers money to create an app, it costs us money to build and maintain an operating system and an app store,” said a Google spokesman in a statement on the South Korean legislation. “We’re going to think about how we can comply with this law while maintaining a model that supports a high-quality operating system and app store, and we’ll share more about it in the coming weeks.”
Apple, meanwhile, warned that the bill could worsen the usage of their products. “The Telecommunications Business Act will expose users who buy digital goods from other sources to the risk of fraud, undermine their privacy, make it harder to manage their purchases and make features like ‘Ask to Buy’ and parental controls less effective,” said a company spokesman.
Here’s everything we know so far about legal efforts to take over the Apple and Google app stores.
It happens in the European Union
The EU is investigating Apple in response to complaints from music app maker Spotify and others who say:by charging up to 30% for in-app purchases. EU Competition Commissioner Margrethe Vestager said she tentatively agreed with Spotify’s reasoning. A final decision has not yet been made.
Our preliminary conclusion: @Apple violates EU competition law. @AppleMusic competes with other music streaming services. But @Apple charges high commissions from competitors in the App Store and forbids them to provide information about alternative subscription options. Lose consumers.
– Margrethe Vestager (@vestager) April 30, 2021
The US is involved
Earlier this summer, the House of Representatives unveileddesigned to update the country’s antitrust laws and address some of the technology industry’s most controversial practices. One of the bills – there are five in total – would prohibit platforms from discriminating against rivals if passed. That could apply to app stores like those of Apple and Google.
The Senate has also unveiled a bipartisan bill that imposes new restrictions on the operation of app stores. What is known as the Open App Markets Act could change the way people download programs onto their phones, tablets, and computers. Under the regulations: Prohibiting companies from forcing developers to use their payment systems. It would also ensure that developers can notify customers of lower prices on other platforms. It would force companies like Apple to allow alternative ways of installing apps on their devices.
Dishes also set accents
While Apple and Google stare at legislation and regulation enforcement, they also lead high-profile legal proceedings. Above all, the two have locked horns with them Fourteen days Manufacturer Epic Games, which sued both companies in August 2020 for alleged violations of antitrust laws.
The cases were submitted to Epicin its popular game, which allows players to bypass Apple and Google’s payment systems when purchasing in-app items, including the in-game currency used to purchase character accessories. In response, Apple and Google kicked Fortnite out of their app stores, stating that Epic had violated their in-app purchase rules.
The Epic v Apple case was heard in a California courtroom this spring. During the process, the iPhone maker defended the way it operates its app store, including the guidelines that Apple developers say must be followed in order to offer their apps in the store.
Judge Yvonne Gonzalez Rogers, who oversees the case,during his testimony at the end of the trial in which he questioned the lack of competition with the App Store. Epic had argued that Apple’s policy is monopoly: App developers must use their payment processing service on the iPhone with commissions of up to 30%. It seemed like Rogers might agree. “You have no competition for these in-app purchases,” she said.
A decision is expected shortly.