The new framework is the first practical test of how procompetitive rules for app stores will work in practice as regulators around the world grapple with the same issue
The KCC strengthens its recently adopted rules: The Korean Communications Commission has adopted new rules for app stores, enforcing the legislation adopted in September 2021 which prohibits them from imposing their own payment methods on app developers. At the time, Apple and Google said they would comply, but the KCC believed that the rules required improvements and sought input from industry to make amendments. The amended rules ensure that app stores cannot prevent developers from promoting alternative payment systems, and cannot put in place behaviour that in practice forces developers to use app stores’ own payment system (e.g. technical restrictions to an app, or delaying or restricting the use of the app store).
Regulators around the world see app stores as a bottleneck: While South Korea was the first jurisdiction to regulate app stores in this way ex-ante, similar legislation is forthcoming in several others, including the US where the Senate Judiciary Committee recently passed the Open App Markets Act. The EU Digital Markets Act could have similar effects on app stores once it is approved. In Germany, the Bundeskartellamt is deciding whether to designate Apple with “paramount significance” across markets, which could result in ex-ante remedies. According to our Platforms and Big Tech Tracker, antitrust investigations into Apple and Google’s app stores have been opened in five jurisdictions between 2016 and 2021. In the two closed cases (Japan and Netherlands) regulators have required Apple to allow the use of payment systems other than its own.
Practical implementation of these rules will be key: The new Korean framework will be the first practical test of how procompetitive rules for app stores will work in practice, since there is a risk that the implementation of these measures could take away some consumer benefits without meaningfully reducing costs. App stores could still find other ways to charge high fees to developers (which is what Apple did in the Netherlands, by levying a 27% fee on in-app purchases), and it’s not guaranteed that alternative payment systems will be as easy and intuitive for consumers. In the US, the debate on the Open App Markets Act also highlighted potential security risks linked to the “sideloading” of apps (i.e. installing them through ways other than Apple or Google’s app stores). We’re likely to witness a trial-and-error phase, where regulators will gradually learn how to strike the right balance between fostering competition and preserving convenience for consumers.
Source: https://eng.kcc.go.kr/user.do?mode=view&page=A05030000&dc=K05030000&boardId=1113&cp=1&boardSeq=52768
