There, That Wasn't So Hard, Was It? South Korea Makes Google Allow Rival Payment Systems In Play Store Apps

Google says it will comply with South Korean law by allowing Android apps hosted on Google Play to include third-party in-app billing systems, a decision that shows the dominant app store duopoly – represented by Apple and Google – losing control of their mobile app platforms.

In August, the South Korean parliament passed a law that banned major app store operators from requiring that developers use only the platform-endorsed payment system for in-app transactions.

"In response to the recent legislation, developers will now be able to add an alternative in-app billing system, alongside Google Play’s billing system, for their mobile and tablet users in South Korea," said Wilson White, senior director of public policy at Google, in a blog post. "At checkout, users will be able to choose which billing system to use."

The blog post shows an image of a sample app interface for selecting a payment service, a scheme similar to the browser choice menu Microsoft had to show to European users from 2010 through 2014 as contrition for abusing its operating system dominance by bundling Internet Explorer with Windows.

The payment system choice menu is only for those in South Korea. White did not explain how user location will be verified and said technical implementation details for app developers will be made available in the coming weeks and months.

The Register asked Google whether it intends to extend this payment system flexibility to other regions. A company spokesperson said, "[We] will let you know if we have anything to share on that beyond what's in our blog post."

White took the opportunity to suggest that those in South Korea who chose an alternative payment provider could be putting themselves at risk.

"Alternative billing systems may not offer the same protections or payment options and features of Google Play's billing system," he said, a tack taken by Apple in its parallel effort to prevent sideloading for iOS apps.

Apple SVP Craig Federighi on Wednesday appeared at the Web Summit in Lisbon to voice Apple's objections to EU draft rules that could allow apps from outside the App Store.

Apple has reportedly told South Korean authorities that it already complies with the law and doesn't need to make any changes, a stance that has elicited an official government warning.

Google's White also hinted at the possibility that being forced to forego revenue by letting third-parties process payments could lead to fees for developers, to support the cost of operating Google Play.

Global action coming?

The South Korean law took shape a year after Epic Games filed lawsuits against Apple and Google to secure the right to use an alternative payment mechanism in iOS and Android apps. Epic, like many other publishers and developers, has been keen to avoid platform fees that had been 30 per cent until they were recently halved for low-revenue publishers.

Shortly after the law was approved in September, Epic Games prevailed in US court on a single point in its complaint against Apple: It won the right to tell developers about third-party payment options outside of iOS apps, though Apple has appealed.

Epic's lawsuit against Google is still ongoing.

• Google trims the cut its Play Store takes from digital subscriptions, ebooks, music streaming
• Google won't fight South Korea's new app store payment laws requiring third-party payments
• Apple beat Epic Games 9-1 in court. Now it's appealed the one point it lost
• Apple warns sideloading iOS apps will ruin everything

Regulators in other regions are looking to trim the sales of both Apple and Google. The Netherlands' Authority for Consumers and Markets has told Apple that it needs to allow third-party payment systems. A Japanese antitrust inquiry into Apple and Google is taking shape, and Apple previously agreed to let reader apps direct users to external subscription mechanisms.

Facebook, which has been supportive of Epic's effort to secure mobile platform payment autonomy, on Wednesday showed that it was ready to take advantage of the legal and regulatory siege to bring more competition to Apple and Google mobile ecosystems.

The social ad biz said it is now offering "the ability to direct people to a website to complete their Subscriptions purchase using Facebook Pay." In so doing, the company allows Facebook creators to avoid paying a fee to Apple or Google.

While the payment promotion concession, granted to Epic by a judge and now exploited by Facebook, has to survive appeal, it seems likely that developers and publishers will be sharing less of their app revenue with Apple and Google in the months and years ahead. ®