[The Editors' Verdict] Can We Escape the Shackles of Mandatory In-App Payments?

The National Assembly, which usually only quarrels, has done something important for the first time in a while. On the 31st of last month, the National Assembly passed the "Telecommunications Business Act Amendment" in the plenary session, which prohibits app market operators from forcing mobile content providers to use only in-app payment methods. From now on, domestic app developers will be able to use other payment services with fees lower than 30% or utilize their own developed payment systems. According to the supplementary provisions, if the president promulgates the law within 15 days after the resolution, it will be enforced immediately from that day. This also puts a brake on Google's plan to expand mandatory in-app payments to all sectors starting October 1.

In-app payment refers to app developers using internal payment systems developed by app markets such as Google and Apple. Smartphone users consume various paid mobile content, from game items to music streaming services, and each time, the app market collects a commission from each app store operator. Google and Apple, which have mandated the in-app payment method, are known to earn $32.7 billion (about 38 trillion won) annually while charging a 30% commission.

Apple and Google's mandatory in-app payment policies have destroyed the global app market platform ecosystem and tightened internal breathing space. Especially for startups that find it difficult to generate early profits, a 30% commission on sales was a significant burden. Last year, Apple even expelled the prominent U.S. game company Epic Games, famous for the game "Fortnite," from the App Store for revealing other companies' payment methods externally. Epic Games also filed a class-action lawsuit with other app developers in response.

As news of the passage of the domestic law banning forced in-app payments spread, major foreign media outlets simultaneously covered it as a key story. The U.S. Wall Street Journal, the U.K.'s Financial Times, and CNBC reported that "this will be a turning point in regulating the monopolies of big tech companies." Last month, similar "Open App Market" bills were introduced in the U.S. Congress. The European Union's (EU) "Digital Markets Act," whose draft was released early last year, is also expected to gain legislative momentum.

Apple, which has become internationally disadvantaged, reluctantly allowed external payment methods on the 27th of last month. However, upon closer inspection, app developers only notify customers via email of alternative payment methods so that customers can make external payments. The 30% commission Apple enforces remains unchanged. Since customers must visit separate websites, etc., if they do not use external payment methods and use Apple payments instead, app developers must pay the 30% commission as before.

When releasing content to users worldwide, marketing through app markets is a reality. Currently, the Google Play payment system supports 2.5 billion Android users worldwide to pay using over 300 different payment methods. To reduce the burden of in-app payment commissions, a separate payment system must be introduced, increasing investment costs. To encourage customers to use separate payment systems, incentives must also be provided separately. If usage frequency is low, using in-app payments may be better in terms of cost and efficiency, so there are clearly limitations. You cannot have everything at once. Problems must continue to be addressed and improved going forward.

Im Juhwan, Honorary President of the Korea Institute of Communications and Information Sciences

This content was produced with the assistance of AI translation services.