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South Korea plans to fine Google and Apple 63.7 billion won for forcing in-app payments
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According to a report by Korea JoongAng Daily on October 28, South Korea's Korea Media Communications Commission (KMCC) plans to fine Google and Apple a combined 63.7 billion won, about 321 million yuan. The reason for the penalty is that the two companies forced developers to use their in-app payment systems. Multiple sources said that KMCC held a plenary meeting that day and approved the relevant corrective orders.
The penalty is based on violations of the Telecommunications Business Act. KMCC plans to fine Google 42.9 billion won, about 216 million yuan, and Apple 20.8 billion won, about 105 million yuan. In-app payment means that developers must complete in-app purchases through Apple's or Google's own payment systems rather than using payment systems they operate themselves.
Depending on developers' revenue, the two companies' commissions can be as high as 30%. This has caused dissatisfaction among developers, who believe the fees are too high. In 2021, South Korea amended the Telecommunications Business Act, becoming the first country in the world to legislate a ban on the mandatory use of in-app payment systems.
Under the law, regulators can impose fines of up to 3% of relevant revenue on app store operators that violate the rules. After the law was amended, Google changed its policy to allow developers to access third-party in-app purchase systems. But critics believe the adjustment is of limited help, because developers using external payment systems still have to bear additional costs.
Critics point out that the additional costs include fees paid to South Korean local payment gateway service providers. In October 2023, the Korea Communications Commission (KCC, the predecessor of KMCC) announced a fine of 42 billion won for Google and 21 billion won for Apple. The commission also summoned representatives of the two companies' headquarters to hear their opinions.
This time, KMCC's approval of corrective orders and plans to impose fines shows that South Korean regulators are taking measures against app store operators under the law amended in 2021. The case involves app store payment and commission rules. How the subsequent penalties will be implemented, and whether the two companies will take further measures, remain to be seen.
