Does the Anti-Google Law Actually Help Google and Hurt Startups?
Abstract
South Korea passed a law prohibiting firms like Google and Apple from requiring third-party smartphone apps to facilitate consumer purchases only by going through Google and Apple, intended to prevent Google and Apple from charging excessive fees on in-app purchase revenues. I argue that this so-called Anti-Google Law (AGL) would be ineffective. Much of the discourse over the AGL and similar proposals overlooks an important fact: while developers might want to collect payments for in-app purchases directly, most consumers would prefer that the apps they use go through Google and Apple because Google and Apple enable consumers to buy things from nearly every app by registering their credit card only once–instead of registering it separately for every single app they use. Because the AGL fails to account for this consumer preference for convenience, I argue that the AGL permits apps to collect payment directly only in theory without creating the conditions needed for that to happen in practice, and that the AGL provides governments around the world considering similar legislation an object lesson in pitfalls to avoid.
