South Korea's Media and Communications Commission has imposed penalties totalling 63.7bn won ($47.6m) against Google and Apple for violations of the country's 2021 app store legislation. Google faces a fine of 42.9bn won ($32m), while Apple must pay 20.8bn won ($15.5m). The regulator determined that both companies compelled app developers to rely on their proprietary payment infrastructure and withheld explanations for delayed app reviews. As part of the enforcement action, each company must grant Korean developers the ability to incorporate links to external payment methods within their applications within a three-month window.
Commission charges on alternative payments
Although both firms ostensibly permitted the use of third-party payment solutions within applications, they levied a 26% fee on such transactions, according to the regulator's findings. The companies additionally restricted the visibility of external payment website links and disabled certain functionalities, effectively eliminating genuine alternatives for developers.
Google imposed restrictions on how developers could present pricing information across different payment methods. Apple required developers to distribute a separate application version to enable third-party payment options.
The regulator also cited Apple for discriminatory pricing practices targeting Korean developers. Between July 2015 and January 2023, Apple deducted its commission from Korean prices that included value-added tax, whereas it calculated commissions on overseas developer prices before VAT application.
I hope this sanction will be a turning point for an app market structure that developers and users can feel
KMCC chair Kim Jong-cheol
Implementation timeline and requirements
The companies have been given one month to present implementation plans, with a three-month deadline to execute the required modifications. These changes encompass enabling external payment links and furnishing transparent justifications for application review delays. Apple must additionally eliminate disparities in how it treats Korean versus international developers. The legislation itself does not mandate specific commission rates, leaving such determinations to negotiation between the platforms and developers.
The final penalty amounts reflect each company's revenue derived from Korean operations. Regulators had previously indicated potential fines reaching 68bn won before settling on the current figures.
Company responses
Apple stated that it respectfully contests the decision, asserting that its operations align with Korean legal requirements and indicating it is evaluating potential legal remedies. The company also emphasized that its payment infrastructure safeguards consumers against fraudulent transactions.
Google expressed regret regarding the penalty, noting that its compliance initiatives and contributions supporting Korean developers were not adequately acknowledged in the decision. The company indicated it would examine the formal ruling before determining its next steps.
Broader regulatory landscape
App store payment regulations face mounting scrutiny across multiple jurisdictions. An Australian court recently mandated that Apple permit competing app stores on iPhones. The European Union continues discussions with Google following a €890M penalty under the Digital Markets Act. In the United Kingdom, a class action lawsuit alleges that Google has overcharged Play Store users.
Source: The Next Web
