Wednesday, September 1, 2021

South Korea App Store Bill

Sami Fathi (Hacker News):

South Korea today passed a bill that bans Apple and Google from requiring developers to use their own respective in-app purchasing systems, allowing developers to charge users using third-party payment methods, The Wall Street Journal reports.


The bill is an amendment to the existing Telecommunications Business Act. It aims to ban Apple and Google from unfairly exploiting their market position to “force a provider of mobile content, etc., to use a specific payment method.”

David Heinemeier Hansson (tweet):

But as much as South Korea is an important market, particularly for Google, it’s not the fifty million people there that truly scare either of these companies. It’s the crack in the dam. The one that’ll soon flood their scarecrow arguments on app-store payment mandates around the world.

South Korea just made it a lot easier for every other country in the world to pass their own laws outlawing anti-competitive app store payment mandates. These countries will be able to point to South Korea to show that allowing developers to use Stripe, Square, Braintree, PayPal, or whatever to charge their customers won’t bring about app armageddon. Reality is going to refute the fear that Apple and Google have been working so hard to stoke.

Steve Troughton-Smith:

Lot of the discussion around this, especially from Apple’s side, makes it sound like a potential in-app payment wild west. What that ignores is that there are payment processors that customers do trust — Amazon, Stripe, PayPal, et al

Those services are just as easy, if not easier, as Apple’s to cancel/refund/unsub with. And prices will be lower, as a result, if offered side by side. There is nothing stopping Apple enforcing — by policy — that all apps using IAP must adhere to the system IAP family controls

How does Apple’s in-app purchase stay as a preferred option for consumers given the choice? By competing. Lower rates & better terms for developers. If Apple’s IAP really were the best option out there, developers wouldn’t be looking elsewhere to try and sustain their business

If Apple cared about consumers more than the paltry sum it makes from developer revenue, it would drop App Store & In App Purchase commissions to as low as realistically possible, so that everybody would want to use the system. Match other processors — you can afford to

John Gruber:

I see a clear difference between purchasing an app or game from the App Store and making an in-app purchase within an app or game after having installed it. My understanding of the new South Korean law is that it only pertains to in-app purchases, so the distinction, I believe, is more than just semantics.


I am confident that the overwhelming majority of typical users are more comfortable installing apps and making in-app purchases on their iOS and Android devices than on their Mac and Windows PCs not despite Apple and Google’s console-like control over iOS and Android, but because of it. And if these measures come to pass and iOS and Android devices are forced by law to become pocket PCs, I think there’s a high chance it’ll prove unpopular with the mass market. The masses are not clamoring for the app stores to be opened up. These arguments over app stores are entirely inside baseball for the technical and business classes.


The part of Apple’s statement about “Ask to Buy” and parental controls, though, I think is sophistry. It’s certainly true that the “Ask to Buy” feature currently wouldn’t work with third-party in-app payment processing, but that’s because nothing in iOS is built to support outside payment processing for in-app purchases. If required to support third-party payment processing, Apple could and should create APIs to support them through the existing “Ask to Buy” process, and the App Store guidelines could and should be expanded to require supporting all parental control APIs regardless of how payments are processed.


Update (2021-09-10): John Gruber:

I have a rough English translation of the law, and my understanding is that the above ban on “delaying” or “deleting” apps is specifically related to retaliation for using their own payment processing. It’s not a ban on removing apps from the stores for just cause.


9 Comments RSS · Twitter

Kevin Schumacher

Just because everybody and their brother uses Stripe as their One And Only payment method doesn't mean consumers trust it. And PayPal has spent the last decade and a half earning a reputation as being willing to close people's accounts and holding onto funds for six months with zero recourse--and that's not just among tech-savvy people.

I am not trying to argue that developers shouldn't have the option to use other payment methods, but I can't think of a third-party payment processor off the top of my head that I trust as much as Apple when it comes to the safety of my data, ease of use, and subscription management.

Apple is, of course, overplaying their hand with their statements about this, but they're not fundamentally wrong about consumer trust.

(Google is a whole other story.)

The masses are not clamoring for the app stores to be opened up. These arguments over app stores are entirely inside baseball for the technical and business classes.

Oh, those pesky screeching voices of the minority again.

I have several subscriptions that are paid via PayPal (which included NYT until I canceled it last year) and while it is easy to manage them, it's not easy to find the proper page on your PayPal account to do so. PayPal obviously doesn't want their users easily canceling subscriptions.

So where is it? Most people would probably think it's somewhere on your "Account Overview" page. Hmmm... there's no link for Subscriptions there. Maybe it's under the "More" button. Hmmm, lots of links here, but nope. Ah! Perhaps it's under the "Wallet" link. Nope, nothing there. "Send and Receive"? Nope. "Activity"? Nope.

The only thing left is the "Settings" gear. I don't know why it'd be under a settings/preferences link, but let's have a look. Hmmm, nothing on the first page that comes up. Maybe it's this "Payments" link? Ahh... there it is "Manage Automatic Payments".

PayPal also has some other sleazy dark patterns / bad UI. They used to allow you to set your preferences for currency exchange to "Always pay in foreign currency". Not anymore. Now if you have, for instance, a PayPal US account and go buy something from the UK, it defaults to paying in USD every time and charging an exchange rate that's 5%+ higher than the prevailing rate which your bank/Visa card would charge. You have to go through a few extra clicks to change it back to GBP. Every time!

Sleazy. While I think choice is good competition for Apple, PayPal is not one of the good guys.

Whilst it's true that "the masses" aren't clamouring over a change, those that do tend to be developers whose livelihood depend on it. Maybe listen to the people with an issue, rather than those that don't give a shit.

Also, I know I'm in a minority here, I don't use amazon (because I believe in healthy competition, and I'm happy to forgo things in order to do my bit to ensure it) and I also don't use PayPal (because I think they're a shit company).

I still don't find paying for things on-line to be a hassle. My phone and browser know my billing adress and credit card number + expiry date. All I have to remember is a three digit CVV code. There are also many other third party payment providers that I don't mind using, sometimes I can even pay by direct transfer from my bank, or by using the Swedish Venmo equivalent.

I don't see paying with anything but Google/Apple Pay as a negative. Who knows, maybe Apple will start charging sensible prices for their service so that devs don't have to implement other solutions at all?

It's absolutely unclear how it all going to move forward.
If each country starts creating new laws and regulations how App Store must operate it just nearly impossible to follow all those new rules.
Probably it all will come to ultimatums and pull out of the market possibilities rather soon. Most likely Apple and Google will comply with minor request but will draw a line on major ones. But who knows.
Over all it does not look like a good for the users, even though changes are needed.

"If each country starts creating new laws and regulations how App Store must operate it just nearly impossible to follow all those new rules."

That's not true. Companies already comply with different laws in different countries all over the world. There is absolutely nothing stopping Apple, the world's wealthiest company, from either complying with all local laws individually, or implementing a solution that satisfies most or all laws collectively (these laws will all have similar aims).

Apple could also preemptively change the App Store, and thus negate the need for these laws to begin with.

Companies do sometimes elect to leave markets, rather than comply with laws, but that is almost never because they can't comply with the laws, but rather because they decide that complying with the laws creates more (direct or indirect) costs than leaving the market.

FFS, Apple is complying with draconian, hostile Chinese laws rather than leaving that market. They can let people pick a different payment provider without going out of business.

All this discussion about whether people care about outside payments missing the point. The experience right now is they can't even USE it on the apps! There is no IAP for Netflix, or Kindle, etc. So its irrelevant what people trust. There is no alternative. So by allowing outside payments, people don't have to go the web to buy - they can do it right in the app! Just a different way than Apple wants.

There's a lot of opinions about how good/bad this is for South Korea from a lot of people that have never set foot in the country. No consumer in South Korea is in love with online payment systems because they are all garbage. Only politicians getting kickbacks from companies that want to thrust another broke-ass payment system on consumers and carve of some of those sweet billions Apple is making and software developers who rightfully deserve not to have to pay another Apple tax want this to happen. However, if were to somehow result in more technological openness in South Korea and things like ApplePay were an option next to SamsungPay, then that would be a small win for the consumer. The reality is though, it won't happen though. Homegrown, subpar payment systems will be an option or the default, or worse, the only option.

>What that ignores is that there are payment processors that customers do trust — Amazon, Stripe, PayPal, et al


> Those services are just as easy, if not easier, as Apple’s to cancel/refund/unsub with.

Er. They are?

For starters, they're automatically worse than Apple's ivory-tower-ideal-world, because now you have to go to Amazon, Stripe, _and_ PayPal, _on top of_ Apple, to see "what are all my subscriptions? Where did I subscribe to XYZ?".

As Gruber says, an API to enable to unified interface would be welcome there.

But even ignoring that, no, I don't recall any of those being "just as easy if not easier" as Apple for managing subscriptions.

PayPal does have a "manage automatic payments" page, but it doesn't make it transparent at all which of those are subscriptions, and which are permissions for a company to withdraw money (e.g., my local public transport). Nor does it provide a list of any kind. Gruber rightfully complains that Apple's list sorting is baffling (and I would add that it also isn't configurable), but it's still better than not having any list at all.

Amazon provides a "Memberships & Subscriptions" page. I can't comment on it because I don't have any.

Maybe Amazon or Stripe is "just as easy if not easier"; PayPal certainly is not.

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