South Korean Govt curbs Google, Apple dominance in mobile payment market

South Korea becomes the first nation to take direct action to restrain the domination of market giants Apple & the Alphabet-owned Google. The new Telecommunications Business Act will allow users to choose between multiple payment providers freely. 

Prior to the law, Apple Inc and Apple had shared a duopoly in the Korean mobile payment market. It excluded other market players indulging in mobile payments. Additionally, both firms imposed a fee of around 30% on the purchases made through their stores. The new law is said to put an end to their indirect control over the market.

Reportedly, the Apple spokesperson has argued that allowing alternative payment solutions can lead to their privacy invasion or fraudulent cases. Apple made a public statement on Tuesday saying, it “will put users who purchase digital goods from other sources at risk of fraud, undermine their privacy protections,” 

However, this has restricted the new Korean mobile payment development entrants to put forward their best foot in the market. Since the dominance hindered other players in the market, a committee was set up to make decisions on the ongoing tensions in the mobile payment market. The bill was passed in an assembly vote on Wednesday. 

In an interview with Reuters, Lee Hwang, a Korea University School of Law professor, said, “Google and Apple aren’t the only ones that can create a secure payment system.” He opposed the idea of a duopoly in a financial market. “I think it’s a problem to try to inspire excessive fear by talking about safety or security about using different payment methods.” he further added. 

The move was said to result from an announcement by Google that required users to make Google payments for any in-app purchases. From September last year, Google began charging fees on the payment of digital goods. The policy received great opposition from users and other market players stating that the charges were unfair. 

A recommendation through an Australian report has suggested the government or authoritative body be given the power to appoint tech firms as payment providers. This will apparently bring regulation to digital wallets and clarify its role.