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South Korean regulator fines Google and Apple 63.71 billion won
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- DeepHorus
The Korea Communications Commission recently decided to impose a combined fine of 63.71 billion won (about $48 million) on U.S. companies Apple and Google. The penalty targets the two companiesā use of restrictive policies to force developers to use their own payment systems. The commission required the two companies to rectify their payment and review policies within a set deadline.
South Korea revised the Telecommunications Business Act in 2021, prohibiting app store operators from forcing developers to use specific payment methods. The regulator has been investigating Appleās and Googleās related policies since 2022. This fine is the first penalty since the regulation took effect, with a focus on whether alternative payment systems can truly compete.
The investigation showed that although Apple and Google allow developers to use alternative payment systems, they still charge transaction commissions of up to 26%. Developers also have to bear the costs of alternative payment systems themselves, and the total cost may be higher than in-app purchases. The regulator believes that this fee mechanism and attached conditions make it difficult for alternative payments to create real competition.
The regulator also found that the two companies engaged in discriminatory treatment and review delays. Google restricted developers from displaying prices for different payment systems, while Apple required developers using alternative payment systems to submit their apps separately. Both companies were accused of unreasonably delaying reviews and failing to adequately explain the reasons for delays and completion times.
Apple was also penalized for using different commission calculation methods for domestic Korean and overseas developers. The regulator said that from July 2015 to January 2023, Apple charged Korean developers a 30% commission based on the final consumer price including VAT, while for overseas developers it did not calculate the commission on the VAT amount. This constitutes unfair discriminatory treatment.
South Korea requires Apple and Google to complete rectification within three months, including allowing developers to provide external links in apps and reasonably adjusting the commission rates for alternative payments. Google also needs to improve the rules for the alternative payment interface, and Apple needs to adjust the requirement for separate app submission. Google has announced adjustments to its payment policy, while Apple disagrees with the penalty decision and says it is evaluating legal options; this case will affect app store rules in South Korea.
