A government official has warned that an investigation into Apple Inc's compliance may be conducted after Apple Inc failed to enforce new rules from South Korean regulators requiring the company to stop forcing app developers to use its payment system, Zhitong Financial APP has learned.
Apple Inc and Alphabet Inc-CL C, the technology giants, have long used their market monopolies to charge up to 30 per cent commission from app developers while excluding alternative payment programs on the grounds of protecting users from fraud and privacy violations. South Korea amended the Telecommunications Commerce Law in August, which allows app developers to freely choose their payment systems so that they can trade directly with users without being charged by the platform.
A South Korean Communications Commission (KCC) official in charge of the matter said the bill came into effect in September. However, Apple Inc has told the South Korean government that the company has complied with the relevant laws, so there is no need to change its app store policy. "this goes against the purpose of the amendment bill," the official said. "
It is reported that KCC is still in talks with Apple Inc on compliance. KCC will require Apple Inc's South Korean subsidiary to introduce a new corporate policy to give app developers more autonomy in using payment systems; if Apple Inc fails to comply with the new rules, the regulator will consider measures such as fact-finding, which could be a harbinger of fines and other penalties.
Apple Inc did not comment on this for the time being.
As another technology giant affected by the new rules, according to sources, Alphabet Inc-CL C has informed KCC that the company plans to abide by the relevant laws, including allowing third-party payment systems to go online, and will discuss the matter with regulators from next week. Alphabet Inc-CL C also declined to comment.
As for the different attitudes of the two companies towards the new regulatory rules, Jung Jong-chae, a lawyer who specializes in antitrust affairs, said Apple Inc suffered more losses in the process of revising the regulatory rules in South Korea than Alphabet Inc-CL C. "the difference between Apple Inc and Alphabet Inc-CL C in their willingness to make concessions may be due to Apple Inc's control of everything from hardware to the operating system, from the application market to the payment system," he said. If Apple Inc's dominant position in any field is broken, it will lose more, because this may cause Apple Inc to further lose his dominant position in more other fields. "