Does the Anti-Google Law Actually Help Google and Hurt Startups?
On August 31, 2021, South Korea passed a law prohibiting smartphone application (app) store operators from imposing particular payment systems on the apps hosted in their app stores, intended to prevent dominant firms such as Google and Apple from charging exorbitant commissions on in-app purchase revenues. This so-called Anti-Google Law, a similar version of which is being considered by the U.S. Congress, was widely praised by prominent developers and politicians as improving apps’ bargaining position with respect to monopolistic app store operators.
This Article argues that the Anti-Google Law (AGL) risks achieving the opposite effect by making small app developers even more beholden than they are now to dominant platforms. Much of the discourse over the AGL and similar proposals overlooks a basic fact: while developers might oppose Google’s or Apple’s payment system, many consumers like it because it allows them to avoid having to arrange payment separately for every single app on their phones. Whereas apps with large and devoted user bases could sustain the user attrition resulting from switching to their own payment systems, typical apps without such devoted followings may not. I argue that the AGL merely permits apps to use their preferred payment systems in theory without creating an environment in which apps could afford to use their preferred payment systems in practice, and that the AGL provides governments looking to adopt similar legislation an object lesson in pitfalls to avoid.
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