Hard blow for two of the most powerful tech giants. A new law turns their business upside down

A new law recently passed in South Korea puts a lot of pressure on the business of two of the world’s most powerful tech giants. It’s about Google and Apple.

Google and Apple will need to allow app developers to use alternative payment systems. This is the measure taken by the South Korean authorities.

Technology experts say the decision in South Korea could be just the start, after which other countries will take action.

The amended law on telecommunications business was widely approved by the country’s National Assembly, with the support of President Moon Jae-in’s party. The normative act will enter into force after it is signed by the president.

Under the new law, developers will be able to select which payment systems to use to process in-app purchases, which means they could avoid the fees of the two tech giants.

Apple commissions, for example, account for up to 30% of some purchases made through the company’s platform – and developers say they have no choice but to comply because Apple doesn’t allow customers to comply. download applications from a source other than the company’s official store.

The South Korean bill prohibits app store operators from unfairly using their market position to impose a certain method of payment on businesses.

When the law comes into force, offenders could be fined up to 3% of their annual sales, in addition to up to 300 million won Koreans ($ 257,000) in penalties.

The legislation has been dubbed the “anti-Google law” in the country because politicians claim that the Silicon Valley tech giant has taken advantage of its long-standing dominance and inferior developers.

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