S. Korea’s cabinet approves revised enforcement decree on in-app payment law

South Korea’s cabinet approved a revised bill that would ban app store operators from forcing developers to use their in-app payment systems, according to the Korea Communications Commission (KCC).

The revision is a follow-through to the Telecommunications Business Act's intra-app billing regulation, which went into effect in September and made South Korea the first country in the world to impose such limitations on Apple and Google's in-app purchasing policies.

Under the revised enforcement order, app store operators must pay a penalty of up to 2 percent of their income for forcing developers to utilize their in-app payment systems, and 1% for applications' delays in evaluation.

The revision also prohibits App store operators from preventing app developers from promoting an alternative payment system, as well as imposing unfair restrictions by using third-party payments systems.

The revised enforcement decree is scheduled to take effect on March 15.

The in-app payment law was designed to remedy concerns about Google and Apple's app stores that force developers to use their proprietary payment systems, which impose fees of up to 30% when consumers buy digital items inside apps.

In November, Google pledged to provide a substitute payment system on its app store in South Korea for a reduced service charge.

Apple announced in January that it will provide a lower-cost alternative payment system than the existing 30 percent service fee in line with the new legislation.