![]() ![]() ![]() To the contrary, the legislation promotes the access of more app developers and purchasing systems to the Korean market and does so without reducing or discouraging the number of app market operators accessing the Korean market.Īrticle XVII requires each WTO member to accord services and service suppliers of any other WTO member treatment that is no less favorable than it accords to its own. Further, the legislation does not impose any limits on the number of service suppliers or service operations in Korea. and other non-Korean app developers, while app market operators continue to have full access to the Korean market. By prohibiting such behavior, the legislation encourages greater access to the Korean market by U.S. It prohibits app market operators from compelling use of their in-app purchase system or unreasonably delaying approval of a developer’s app to be distributed through the operator’s OS platform. ![]() The Korean legislation does not violate GATS Article XVI because it does not restrict, but rather promotes, market access. And, in the case of Korea, they claim that the bill violates the national treatment provisions in the Korea-US Free Trade Agreement (the “KORUS”).Ī review of the WTO GATS and KORUS demonstrates readily that the Korean bill is not in violation of the WTO GATS or KORUS.Īrticle XVI of GATS provides that in sectors where market access commitments are undertaken, a member cannot limit market access by imposing limits on the number of service suppliers or service operations. What is surprising (at least to us international trade lawyers) is that they claim that this type of legislation violates the national treatment rules in the General Agreement on Trade in Services (“GATS”) of the World Trade Organization (the “WTO”). A leading example is the Republic of Korea, where its legislature has just voted to enact such a prohibition.įearing this might become a global trend, the leading Internet platform providers have lobbied against the Korean bill, which is not surprising. A number of countries are considering legislation to prohibit such mandates by Internet platform providers. ![]() The temptation to use their enormous leverage to gain further economic advantage is understandable, but governments, not to mention app developers, have taken an increasingly dim view of this behavior. There have also been commission charges as high as 30% imposed on digital goods or services sold through their stores. Some platform providers mandate app developers to use the platform’s in-app purchasing system as a condition to sell the apps on the platform. Internet platform providers rely upon developers of applications to populate their application stores. ![]()
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