Google and Apple have a dominant position in the market as they account for 88% of the app market, use different operating systems, force a particular payment method based on their de-facto monopolistic position, and take huge profits by imposing 30% fees for the amount paid for content.

If they are left unchecked, such conditions may greatly undermine not only Korea’s start-up ecosystem but also its digital content industry and weaken the growth of K-content, and such exorbitant fees will lead to a higher price to use content, which will be passed on to consumers.

Hence, this Act aims to ban app market operators from engaging in any unfair practices based on their dominant position in transactions such as forcing a particular payment method or unfairly restricting use except for inevitable reasons, including those required to ensure safety in transactions, while allowing other unfair practices based on a dominant position in transactions to be prescribed by Presidential Decree to promote fair competition in the app market business and fairness in the distribution structure.

In addition, this Act aims to require the app market operator to set the fee rate in compliance with requirements set forth by the Korea Communications Commission and apply a preferential fee rate to small business owners in an effort to promote collaboration between app market operators and content developers for shared growth and protection of users (Article 22-9 newly inserted).

Article 22-9 (Calculation of Appropriate Fees, etc.) ① The app market operator shall not engage in any of the following unfair practices based on a dominant position in transactions. However, the foregoing does not apply to inevitable situations, including those required to ensure safety in transactions.

1. Any practice that forces a particular payment method

2. Any practice that unfairly restricts use

3. Other unfair practices based on a dominant position in transactions as prescribed by Presidential Decree

② The app market operator shall set the fee rate fairly and reasonably and must not take excessive fees unfairly.

③ The Korea Communications Commission shall define the requirements which the app market operator must comply with in setting the fee rate under paragraph 2.

④ The app market operator shall apply a preferential fee rate set forth by the Korea Communications Commission to small business owners that is less than the scale prescribed by Presidential Decree.

⑤ The Korea Communications Commission may request corrective action, notify relevant authorities, or take other necessary measures if the app market operator violates paragraphs 1, 2, or 4.