Apple & Google vs Korea's app store rules

One tech giant complies, the other one prepares to fight

👋 Welcome to FWIW by David Tvrdon, your weekly tech, media & audio digest.

In this edition

  • South Korea’s app store law: Google complies, Apple is prepared to fight

  • Tim Cook has crypto

  • Microsoft unveils a $249 Surface Laptop SE for students

Google complies, Apple is prepared to fight

In August, South Korea has passed a new law aimed at regulating mobile app stores. In short, the bill opens the door to alternative purchase options, so that developers could also use other payment methods, not just the ones imposed by the app stores (Apple and Google).

Last week, Google announced changes it will make to its in-app payments options in South Korea to comply. In a blog post, the company described it will allow third-party payment options for in-app purchases to appear alongside its own Google Play billing system in Android apps.

It will still charge developers a commission if users pay using a third-party system:

Service fees for distributing apps via Android and Google Play will continue to be based on digital sales on the platform. We recognize, however, that developers will incur costs to support their billing system, so when a user selects alternative billing, we will reduce the developer’s service fee by 4%. For example, for the vast majority of developers who pay 15% for transactions through Google Play’s billing system, their service fee for transactions through the alternate billing system would be 11%. As another example, certain categories of apps participating in our Media Experience Program, such as an eBooks provider, will pay a 10% service fee for transactions made via Google Play’s billing system, but only 6% for transactions on an alternative system.

According to Protocol, the idea behind the South Korean legislation is that competition will inevitably drive down fees charged by Apple and Google. However, Google's 26% fee is still rather high and suggests the company doesn't foresee consumers flocking to third-party payment systems so long as developers aren't able to offer drastically more competitive prices.

And then there is Apple, which told the South Korean government it already complies with the law. According to The Wall Street Journal, the company has told the South Korean government that its current policies are in line with the law.

They aren’t, of course, at least not from my point of view and understanding the bill.

So, it will be up to the Korea Communications Commission to open an investigation into Apple’s practices which may lead to fines for the company.

To understand Apple’s hesitancy, let’s take a look at the revenues generated from app store fees. In 2020, Google's Play Store generated an estimated $11.6bn in fees, while Apple generated $21.7bn from its App Store, according to Sensor Tower estimates cited by Bloomberg.

Apple has much more to lose here. Also, governments all over the world are looking to South Korea and I bet several are already drafting very similar laws.

I think this is a good thing. If competition doesn’t drive fees down, regulation should step in.

Other Apple and Google related news

  • Alphabet, Google's parent company, is launching Isomorphic Laboratories, which will use AI to find new drugs. The new company branches off Alphabet's DeepMind, which also uses technology that aims to develop new drugs. [Bloomberg]

  • Google lost its appeal of a $2.8bn antitrust fine. The decision by the Luxembourg-based General Court related to a 2017 decision by the European Commission to fine Google €2.4bn (about $2.8bn) for giving preferential treatment to its own price-comparison shopping service over rival services. [NY Times]

  • Apple is introducing a new business offering called Apple Business Essentials that combines device management, 24/7 phone support for IT and end-users, business iCloud storage, and an option for onsite repairs for businesses of up to 500 employees. [9to5Mac]

  • Apple and foundry partner TSMC plan to produce 3-nanometer chips for Macs as soon as 2023. The M1, M1 Pro and M1 Max are fabricated on a 5-nanometer process. Another sign that the Apple Silicon roadmap leaps ahead of Intel. [9to5Mac]

  • A federal judge ruled on Tuesday that Apple could not delay making changes to its App Store, a move that could soon allow app developers to directly communicate with customers about ways to pay for services outside Apple’s ecosystem. Now Apple may have to rewrite its policies to allow app developers to point users to alternative payment methods as soon as December. [NY Times]

  • Tim Cook on the future of the internet, his crypto investment, mental health, China relations and more. Yes, Cook has invested in cryptocurrency personally, but Apple has no plans to do so. The Apple CEO spoke at the NYT’s DealBook Online Summit.

🖥️ Intel lost more than 2 percentage points of market share to AMD in the third quarter. AMD accounted for 24.6% of personal-computer processor sales in the third quarter, up from 22.5% a year earlier. The shift was accelerated by a steep drop in demand for chips used to power low-end notebooks such as the Chromebook, which rely on Intel processors. Intel still has 75% of the market for PC processors and remains the world’s biggest chipmaker. [Bloomberg]

🤑 Twitter is embarking on a big subscription experiment. Twitter Blue offers for $2.99 per month an undo Tweet button, customizable app icons, ad-free articles on selected news sites and a new ‘top articles’ section. [Protocol]

🤦‍♂️ Facebook says it just can't keep up with Oversight Board's recommendations. The group has made dozens of recommendations since the beginning of the year, but the platform said it's having trouble responding by the board's 30-day deadline. [Gizmodo]

💻 Microsoft unveils a $249 Surface Laptop SE together with Windows 11 SE, a new Chrome OS competitor. It’s another effort to go after the school market. The base model ships with an Intel Celeron processor, 4GB of RAM, 64GB of eMMC storage, and an 11.6-inch (1366 x 768) display. [The Verge]

✋ One of the biggest ransomware crackdowns ever is underway. The US and EU announced seven arrests yesterday, all linked to the REvil gang. [NBC]

⚖️ Facebook whistle-blower Frances Haugen said the EU's draft tech rules could become a "global gold standard". She endorsed the Digital Services Act that’s currently before Parliament and which is intended tackle her former employer and its biggest peers. [Reuters]

🗣️ An interview with Anker CEO Steven Yang. Fascinating company and great products. [The Verge]

🤨 Microsoft partners with Meta to integrate Teams into its Facebook-like Workplace. I read this like 10-times and still am confused. As someone on Twitter wrote, the end is nigh. [The Verge]

🚗 What to think of Rivian, the Tesla challenger backed by Amazon and Ford? Investors seems to be very excited as the company ended its first day of trading valued at $86bn, though its deliveries so far total 156. But it all comes down to scaling and whether Rivian will be able to manufacture hundreds of thousands to million cars a year. We’ll see. [NY Times]

🪑 Working from home and haven’t bought a good chair yet? Do yourself a favour. No, this is not an ad, just me trying to help you. It will change your home-office experience.

📺 Disney+ didn’t have a good quarter, adding only 2.1 million customers, the slowest growth since launching two years ago. As of October 2, Disney+ had 118.1 million paid subscribers worldwide. [Variety]

👉 If you are interested in topic-focused & niche newsletters, this discussion’s is for you. [WAN-IFRA]

✨ The Verge is updating its public ethics policy to be clearer in its interactions with public relations and corporate communications. From now on, the default for communications professionals and people speaking to The Verge in an official capacity will be “on the record.” [The Verge]

😮 FTC issues major warning to deceptive subscription behaviors. Among other things, it says cancellation needs to be as easy as signing up. Maybe you don’t know, but you still have to call major US newsoutlets including WSJ or NY Times to cancel your digital (!) subscription. [A Media Operator]

📥 On ode to newsletters, by Dave Pell. [The Atlantic]

1️⃣ This podcast became a hit despite tackling an uncomfortable topic. Learnings from its creator

2️⃣ How to think about keyword cannibalization on news websites

3️⃣ More than Bild – the sexual misconduct problem at European publishers

4️⃣ Build a loyal community, not a big audience

[ 📬 Get The Fix newsletter delivered to your inbox every week with the latest insights, news, and analysis about the European media market. Sign up here > ]

🎧 The dream of customized audio news isn’t working out (at least not yet). [NiemanLab]

Facebook ads for podcasts don’t seem to be working. Over 2.5 months, Evo Terra spent $360 on a Facebook Ad campaign to grow his podcast audience. It didn’t happen. [Podcast Pontifications]

🎙 Headliner has added auto-posting to YouTube. [Headliner Blog]

🎮 Netflix expands mobile games to iOS. [Protocol]

👾 Unity Technologies is buying Peter Jackson's Weta Digital for $1.625bn. The purchase means Unity gets Weta's visual effects features and pipeline used in tons of popular movies. [Protocol]

Poll: Do you own any cryptocurrency?

  1. Yes.

  2. No.

  3. I don’t trust it.

🙌 Thanks. I used HandyPolls to create this poll (instructions).

Last poll’s results: What are you more excited about - VR or AR? 44% said they didn’t care, it's just too far away. 30% AR, 26% VR.

🙏 And big thanks to Celine Bijleveld who helped me edit this newsletter. You can follow her on Substack here.

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