South Korea may have found a solution to one aspect of Google’s and Apple’s respective app store monopolies, and it’s a great idea. Simply require by law that any companies that enforce in-app payment (IAP) systems, as both do, support multiple payment systems and not just their own.
Apple and Google, naturally, oppose this proposed law. So much so that they’re calling on the US government to protect them from this incursion into their unfair business practices at a time when that very government is investigating them for the same abuses.
Here’s what’s happening: South Korea has introduced legislation called the Telecommunications Business Act which, if passed into law, would require companies that operate app stores to accept multiple payment systems for IAPs, and not force developers to only use their own. Furthermore, the legislation would prevent app store owners from blocking developers that list their apps on other app stores. The legislation is being voted on this week.
Apple and Google had unsuccessfully petitioned South Korea to block the legislation. But now they have turned to the White House, arguing that South Korea is specifically targeting American corporations (and not because they have a stranglehold on mobile app stores, I guess). And doing so is a violation of the two countries’ trade agreement.
It’s unclear how the White House will respond given the irony of this request. Yes, US presidents have traditionally opposed international laws that undermine the power of US corporations. But multiple US regulatory bodies are right now investigating Apple and Google for antitrust abuses, and IAPs are at the core of many of these investigations. And the US isn’t alone: Regulators from around the world, including in the EU, are seeking similar curbs on these firms’ market power.
The problem for Apple and Google is obvious: Opening up IAPs to multiple payment systems isn’t just fair, it would benefit developers and consumers. And there is no valid, direct defense of their current behavior. Instead, they have to turn to side issues like joint trade agreements.