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Google to allow third party app payments in S.Korea -Breaking

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© Reuters. FILEPHOTO: This illustration, taken on April 12, 2020, shows the 3D-printed Google logo. REUTERS/Dado Ruvic/Illustration

By Heekyong Yang

SEOUL (Reuters: Alphabet (NASDAQ)) announced Thursday that it will allow South Korean third-party payment systems to be used in compliance with a law banning major app stores from forcing developers to use these systems.

Google made the announcement after Korea Communications Commission (KCC) requested that the U.S. technology giant come up with plans to comply with the law which went into effect September 1.

Ende August, South Korea’s parliament approved an amendment to the Telecommunications Business Act. It was known as “anti Google law” and prohibits large app store operators such as Google Inc (NASDAQ:). This bans them from demanding developers use their payment system, thus stopping them charging commissions for purchases made in-app.

Google stated in a statement that they respect the National Assembly decision. They also shared some modifications to make it more responsive to the law.

Google charged developers 15% to distribute apps. It said that it would reduce this fee to 11% for users who choose an alternate billing system. Google recognizes the costs developers may incur to support their billing system.

Developers were not sure how this would benefit them.

Google stated that there may be other billing options available which do not offer the same features or protections of Google Play’s.

KCC stated that Google’s plans for South Korea would be put into action this year, but it would only affect South Korea.

Han Sanghyuk (KCC Chairman) stated that Google had confirmed its determination to follow the law. “I hope Google will apply this policy change so it reflects the legislative intent of the revised law.”

Apple also told South Korea’s government, in October, that another app-store operator had informed them it was complying with the new law. They did not have to amend their policy.

KCC announced that they would request a change in policy from Apple’s South Korean division to allow greater payment method autonomy. Apple could be subject to a fact-finding investigation if it fails to follow the instructions. This probe would lead to potential fines and other penalties.

Apple has not yet responded to Reuters’ requests for comment.

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