INTERVIEW Korea warned against heavy sanctions on Apple, Google
Progressive Policy Institute Vice President Michael Mandel speaks during the American Chamber of Commerce in Korea (AMCHAM) Digital Innovation Forum at Grand Hyatt Seoul, Aug. 26. Courtesy of AMCHAM
Pro-Democrat US think tank's economist raises concerns about security, privacy
By Park Jae-hyuk
An economist from a U.S. think tank has raised an issue with the Korean government's move to impose sanctions on Apple and Google for allegedly compelling the use of their own in-app payment systems.
Michael Mandel, vice president and chief economist of the Progressive Policy Institute (PPI) which was described by the Washington Post as a “centrist Democratic institute,” suggested Korean regulators pay careful attention to the security and privacy needs of consumers when making decisions on the sanctions against the two U.S. app store operators.
“The danger is that sanctions against Apple and Google could make it easier for malware providers, which would be bad for Korean users,” he told The Korea Times via email.
His stance was in stark contrast to that of U.S. and Korean mobile content providers, which have urged the Korean government to crack down on the two tech giants.
The Coalition for App Fairness, a U.S. nonprofit organization comprised of app developers, said in a letter last month that it supports Korean lawmakers who have asked the Korea Communications Commission to investigate Apple and Google. The two U.S. tech giants have banned app developers from directing their users to external payment systems and have also charged high commission rates on third-party payment options.
Local content providers have claimed that they have had no choice but to raise their prices to cope with the payment policies of the app market operators, apparently intended to prevent app developers from using third-party payment options.
Mandel acknowledged that gaming and entertainment companies would want Apple and Google to charge lower commission rates so that they can monetize their apps better through download fees and in-app purchases.
However, he expects banks, retailers, manufacturers, telemedicine service providers and traveling app operators to continuously prefer the current system that screens malware for virtually no cost.
“Both companies devote huge technological resources to scanning apps uploaded to their official stores for malware,” Mandel said last month in his presentation on Korea's app economy during the American Chamber of Commerce in Korea forum. “Regulators who underestimate security and privacy concerns run the risk of undercutting consumer trust in the mobile app ecosystems and making it more difficult to use apps for key functions such as banking and health.”
The PPI chief economist suggested the Korean government focus more on app export possibilities, taking advantage of the country's potential to be a global leader in the next wave of 5G-capable apps.
“I expect that Korea has the opportunity to be a global leader in 5G-enabled mobile apps,” he said in the email.
He emphasized that Korea's 5G network will enable its app industry to keep growing, dispelling worries about the end of the app industry boom after the pandemic era, where people will not need to avoid face-to-face communications anymore.