In a stunning example of how regulatory action can drive major change in Big Tech, Google will comply with a new South Korean law and allow developers who target its Android-based Play Store to use alternative—e.g. non-Google in-app payment (IAP) systems. Of course, there’s a major asterisk to this victory: it will only do so in South Korea.
But then that’s why regulatory action is so important: If bigger markets like the United States and the European Union enact similar laws, Google will have to comply in those regions as well. And at that point, it will need to accept the inevitable and allow developers to use the payment systems they prefer, everywhere, instituting a new generation of competition and lower prices.
Here’s how we move forward.
“We respect the decision of the [South Korea] National Assembly, and we are sharing some changes to respond to this new law, including giving developers that sell in-app digital goods and services the option to add an alternative in-app billing system alongside Google Play’s billing system for their users in South Korea,” a Google statement reads.
As you may recall, South Korea proposed this new law in August and then ratified it in September. And then, in a semi-related move, it fined Google $177 million for antitrust violations later in September for good measure: Google, it said, is abusing its market dominance by restricting competition in the mobile OS market.
South Korea is a tiny market, but it happens to be the home of Samsung, its biggest Android partner by far and the world’s largest maker of smartphones. So simply shutting off the Google Play Store in that country wasn’t an option, a move one must imagine the online giant would have otherwise considered. (After all, it shut down Google News in several countries that required it to negotiate payments to the news sources it steals from.)
As always, any step forward is considered progress, and this is not the first step to a more equitable future in mobile. In late October, Google also agreed to lower most of its developer-related Play Store fees, and dramatically, in response to numerous lawsuits around the globe.