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.
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.
read too fast (Score:2)
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.
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"A robot may not injure a human being..." (Score:2)
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.
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You're under arrest for attempting to produce free energy!
reaction (Score:4)
Slashdot doesn't have emoji reactions to stories, so... :clap:
Re: reaction (Score:1)
Won't change a thing. (Score:1)
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...
Re:Won't change a thing. (Score:4, Interesting)
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.
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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.
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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
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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.
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Yeah, it really pisses me off that I can't buy a car at the local grocery store. How dare they prevent me from getting what I want in their store...
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You are missing that they are offering the shelf space, which is what the 30% is paying for. On Google, you can go to another gas station trivially, you just need to get an adapter (sideload an app). Apple offers that option through the web browser, which obviously is limited, but that is what people pay for when they get Apple phones.
Apple and Google both provide a store page, and bandwidth for the apps, that is what the 30% is to cover. Avoiding paying for the service, while still using the service is
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The 30% is paying for 'shelf space' and 'bandwidth'? Good one. According to an article yesterday, the App Store sold something like $40B in the first half of 2012. Are you really trying to claim it cost Apple $12B dollars to provide six months of hosting and bandwidth? That must be the most inefficient operation on the planet.
The only reason they can get away with charging 30% is that they have a monopoly, maintained through anti-competitive means. As laws like this one arise (and more certainly will a
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The 30% is paying for 'shelf space' and 'bandwidth'? Good one. According to an article yesterday, the App Store sold something like $40B in the first half of 2012. Are you really trying to claim it cost Apple $12B dollars to provide six months of hosting and bandwidth? That must be the most inefficient operation on the planet.
It doesn't matter how much profit the shelf space generates. They are due the price for the service they are offering. All you are saying is that their service is in high demand.
The only reason they can get away with charging 30% is that they have a monopoly, maintained through anti-competitive means. As laws like this one arise (and more certainly will appear) and competitors can enter the picture, you will start to see the true value of 'shelf space and bandwidth', and it will be nowhere near 30%.
Except there is no monopoly.
Re: thank consumers (Score:1)
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It's more like you have an Apple/Google car and can only buy gas at their gas station
That's not a valid analogy, gasoline is a consumable and required for the operation of the car. You don't have to purchase apps to use an iPhone or iPad.
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You don't have to purchase apps to use an iPhone or iPad.
Highly debatable, and anyway, jurisprudence in the US is that application ecosystem is not severable from the operating system in terms of antitrust evaluation.
Re: thank consumers (Score:1)
Re: thank consumers (Score:1)
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That's not implied at all. Apple and Google both recover these costs by requiring a publisher to purchase a developer certificate, and the process is no different if you are deploying free or paid apps. The issue is that each of them are currently trying to force things like in-app purchases to go through their respective payments platform, where they're able to dictate a percentage of the transaction, and where if you try to use an alternative mechanism, you'll find your app blocked from the app store. Thi
I'll believe this (Score:5, Interesting)
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and if epic get's back into the app store will it (Score:2)
and if epic get's back into the app store will it koran only?
Yeah, that's consistent (Score:4, Interesting)
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?
Re: Yeah, that's consistent (Score:2)
So can they charge hosting and bandwidth fees now? (Score:2)
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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.
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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 Google? (Score:2)
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
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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.
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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
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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
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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.
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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.
Enforcement? (Score:3)
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.
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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.
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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.