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Businesses Google Apple

Google, Apple Hit by First Law Threatening Dominance Over App-Store Payments (wsj.com) 50

Google and Apple will have to open their app stores to alternative payment systems in South Korea [Editor's note: the link may be paywalled; alternative source], threatening their lucrative commissions on digital sales. From a report: A bill passed Tuesday by South Korea's National Assembly is the first in the world to dent the tech giants' dominance over how apps on their platforms sell their digital goods. It will become law once signed by President Moon Jae-in, whose party strongly endorsed the legislation. The law amends South Korea's Telecommunications Business Act to prevent large app-market operators from requiring the use of their in-app purchasing systems. It also bans operators from unreasonably delaying the approval of apps or deleting them from the marketplace -- provisions meant to head off retaliation against app makers.

Companies that fail to comply could be fined up to 3% of their South Korea revenue by the Korea Communications Commission, the country's media regulator. The law will be referenced by regulators in other places -- such as the European Union and the U.S. -- that also are scrutinizing global tech companies, said Yoo Byung-joon, a professor of business at Seoul National University who researches digital commerce. "Korea's decision reflects a broader trend to step up regulation of technology-platform businesses, which have been criticized for having too much power," Mr. Yoo said.

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Google, Apple Hit by First Law Threatening Dominance Over App-Store Payments

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  • I was reading the headline too fast, and my brain parsed it as "Google, Apple Hit by First Law of Thermodynamics".

    Then my brain immediately branched into a weird subroutine as it tried to figure how Google and Apple are running into problems with conservation of energy. All those server farms are definitely transforming energy from one form to another! Some might look at it as a form of creation, other destruction, but that's a more poetic description rather than a physics-based one.
    • by dargaud ( 518470 )
      You know you are closer to the truth than you imagine. Computing can be expressed in the form of thermodynamics. It's useful for things like comparing compression algorithms, but also to find out the min energy expenditure when flipping a bit, that irreversible operations dissipate energy and a lot of fun about entropy, the end of the universe and such...
    • I was thinking the first law of robotics, "A robot may not injure a human being or, through inaction, allow a human being to come to harm," and was wondering in exactly what way Google and Apple were violating it.

      Yes, if Google or Apple are making robots that violate the first law, I think we should stop them.

    • You're under arrest for attempting to produce free energy!

  • by fulldecent ( 598482 ) on Tuesday August 31, 2021 @10:06AM (#61748539) Homepage

    Slashdot doesn't have emoji reactions to stories, so... :clap:

  • Sounded good and fine, up until this little bit:

    Companies that fail to comply could be fined up to 3% of their South Korea revenue by the Korea Communications Commission, the country's media regulator.

    Okay, so Google can let app developers bypass the 30% Google charges, OR Google can keep doing business as usual, with the addition of passing 3% of Google's 30% to the S. Korean gov't.

    With a fine (tax) that small, you know which way Google is gonna with this...

    • by Anubis IV ( 1279820 ) on Tuesday August 31, 2021 @10:29AM (#61748609)

      Google can keep doing business as usual, with the addition of passing 3% of Google's 30% to the S. Korean gov't.

      I haven't seen any indication this 3% fine is limited to app store revenues. Rather, it's across all revenue streams. Given that both companies make the vast majority of their money outside their app stores, that 3% fine is a lot bigger than you think.

      • by aitikin ( 909209 )

        Google can keep doing business as usual, with the addition of passing 3% of Google's 30% to the S. Korean gov't.

        I haven't seen any indication this 3% fine is limited to app store revenues. Rather, it's across all revenue streams. Given that both companies make the vast majority of their money outside their app stores, that 3% fine is a lot bigger than you think.

        I don't know, it'll really depend upon the wording. Their 220.14 billion won/190 million USD [yna.co.kr] ad revenue was significantly less than their 6 trillion won/5.15 billion USD [reuters.com] Play revenue. I know Google has their hands in many pots but these are the two that we hear the most about.

        Apple, I expect that their revenue in other categories would absolutely make sense to open up for other payment methods.

        • Their 220.14 billion won/190 million USD [yna.co.kr] ad revenue was significantly less than their 6 trillion won/5.15 billion USD [reuters.com] Play revenue.

          Your first link is for Google Korea, a recently established, local subsidiary of Google's, hence why the numbers are so small. Your second link has financials for Google, the parent company, hence why the numbers are an order of magnitude larger, but it doesn't mention total revenue, so while 6 trillion won may sound like a lot, that article doesn't give you a sense of how big that slice is in their total revenue pie. For that, we need to look elsewhere.

          I couldn't find numbers specific to South Korea in a q

    • by Pimpy ( 143938 )

      Yes and no. The GDPR only levies a fine of between 2-4% depending on the severity of the violation. That hasn't been enough for Google to fundamentally change their business model, but it has been enough that they've changed a lot of the ways in which they do business within the EU. The South Korean law will probably be similar - they will offer the flexibility for apps within that region, and continue to lock it down in others, until such a time that more countries begin to follow suit.

  • I'll believe this (Score:5, Interesting)

    by kaatochacha ( 651922 ) on Tuesday August 31, 2021 @10:47AM (#61748679)
    When this law is applied to a Korean Company-Samsung, etc. Until then...it's just protectionism in a different form.
  • and if epic get's back into the app store will it koran only?

  • by hdyoung ( 5182939 ) on Tuesday August 31, 2021 @11:18AM (#61748785)
    Geez, even China hasn't been willing to yank the rug out from under Apple that hard. Can't really tell how that's gonna play out.

    As I've said in other posts, I've got a soft spot for South Korea, so I really want them to succeed. But I don't see a win here for them. First off, if they're looking to improve governance, they need to look in the mirror. The country has pretty much acknowledged that the Chaebol families are above the law. Yeah, yeah they make a show of having an independent judiciary, but when the leader of Samsung gets in TOO much trouble, suddently the rules change. And monopolistic concerns regarding the app stores pale in comparison.

    Maybe South Korea wants to promote a local alternative? That's not gonna go well. SK is a fairly small country. Anything they put into place is going to be a "friendly neighborhood app native app store" that covers a few thousand square kilometers and nothing else.

    What's the endgame here?
  • In return for taking a cut of developer sales, the stores host a page for the app and eat the bandwidth costs for both page displays and app downloads. If a developer uses a payment method other than the stores', are the store providers now allowed to charge hosting and bandwidth fees? Otherwise they'd be hosting the app for free (and why should they do that?).
    • by bws111 ( 1216812 )

      They already get 30% of the app sales. This is about the ADDITIONAL 30% they get by forcing use of their payment processing for in-app purchases. The things purchased in-app are NOT hosted by Apple (or Google), so why should they need to pay hosting on bandwidth fees.

      • So the app developers can then charge $1 for their app but require $10 as an in-app purchase to unlock most of the features. So the stores are virtually hosting the app for free and eating all but $0.33 of the cost. Hardly seems fair.
        • by bws111 ( 1216812 )

          The average IOS App is about 34.5MB. The 'hosting cost' for that is probably measured in pennies, and those pennies are divided up by the total number of downloaders. If it costs Apple more then $0.30 to download a single copy of a 34.5MB app, something is seriously wrong.

  • Why is Google always treated equally to Apple in these App-store lawsuits?
    I think that Google's approach of allowing side-loading (and even alternative app-stores) after checking a scary box and dismissing a warning is the reasonable way to go about this. AFAIK, all official Android phones support side-loading and alternative app stores, do they not?
    I also liked the classic Chromebook approach to rooting: you would have to open the device, and remove or move a bg screw inside, which would bridge a contact
    • by bws111 ( 1216812 )

      Scary looking boxes are called FUD. The purpose of the FUD is to dissuade users from using those alternate methods, which is anti-competitive behavior.

      • by jvkjvk ( 102057 )

        You cannot claim that there are no sketchy app stores out there. Adding in alternative stores can be a security risk. People should be aware of that before enabling. Perhaps a less "scary looking" dialog? /s

      • FUD requires a manipulative intent.

        If you enable "installing unknown apps" as a privilege for an app (a third-party app store) the warning says:
        "Installing apps from this source may put your tablet and data at risk."

        Pretty fucking accurate. There's nothing anti-competitive about letting them know that they're bypassing the built in chain of trust.
        And ultimately, what constitutes the chain of trust isn't up to Google (for Android at large)
        The trusted certificates are installed by the device manufactur
        • by bws111 ( 1216812 )

          The same warning would apply to the play store itself, but they present no such warning when using the play store. Therefore, it is indeed FUD.

          • That's fucking stupid, and you know it.
            Apple and Microsoft both apply the same warning to their desktop software.

            From the perspective of the person who ships the device or operating system, the things they sign are indeed trusted by them, and so no, such a warning is not warranted. Use your fucking head.
  • by mark-t ( 151149 ) <{moc.talfdren} {ta} {tkram}> on Tuesday August 31, 2021 @03:55PM (#61749671) Journal

    They can fine 3% of NK revenue, but will they care? How will NK collect?

    I'm reminded of a wall along the southern US border that Mexico was supposed to pay for.

    • They can fine 3% of NK revenue, but will they care? How will NK collect?

      Assuming you mean SK, here.

      The answer is simple.
      The same way any country enforces its laws on multinats- with the stick.
      You pay the fine, or you don't do business here anymore.

      This tends to work just fine because when you're setting policy for an entire country, you can be in control of a very large amount of revenue for said multinat.

      • by mark-t ( 151149 )

        Ah... for some reason I had thought is said NK, and I was wondering why a company in the USA would even care.

        Still possible Apple won't care one way or the other, and honestly they might just decide to give up 3% of the NK revenue rather than change their policy outright or else deal with the logistical issues that are created with changing it on a country-by-country basis.

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