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S.Korea targets Apple over new app store regulation By Reuters

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© Reuters. FILE PHOTO – The Apple Inc. logo can be seen at the Apple Store on 5th Avenue, Manhattan, New York. October 16, 2019. REUTERS/Mike Segar

SEOUL (Reuters:) Apple Inc (NASDAQ) and South Korea were in a collision over Friday’s new demands that South Korea stop mandating app developers use its payment system. A government official warned of a potential investigation into Apple maker’s compliance.

This development follows South Korea’s August amendment to the Telecommunication Business Act to limit tech giants’ market dominance and to stop big app store operators like Apple and Alphabet (NASDAQ) Inc from charging commissions for in-app purchase.

Last month the law came into force, but Apple told South Korea’s government that they were already following the rules and didn’t need to alter their app store policies. This was according to a Korea Communications Commission official (KCC), who spoke on behalf of the Korean Communications Commission.

According to the official, “This is against the intent of the amended laws,” he said. He requested anonymity since the KCC and Apple were still discussing compliance.

As a prelude to any possible penalties or fines, the regulator will ask Apple’s South Korean subsidiary for a revised company policy that gives greater control over payment methods.

Apple has not yet responded to my request for comment.

Google told the KCC officials that Google intended to follow the law and allow third-party payments systems. They would also discuss the issue with regulators starting next week.

Google didn’t immediately respond to Reuters’ requests for comment.

Jung Jong-chae is a specialist in antitrust law and said that Apple was more at risk than Google under the Korean regulations.

He explained to Reuters that differences between Apple and Google may result from Apple’s control over everything, including hardware, operating system (OS), app market, payment system and software.

Apple has more at stake if dominance is lost on any front. That could result in calls for transparency on other fronts.

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