South Korea fines Apple 20.81 billion won, about $15.7 million, over App Store rules that pushed developers toward Apple’s own payment system. The Korea Media and Communications Commission announced the penalty on October 28 and ordered Apple to revise its payment and app review policies.
The regulator fined Google 42.9 billion won in the same decision, the first enforcement case under South Korea’s 2021 amendment to its Telecommunications Business Act. The investigation traces back to 2022, when it said it would investigate the App Store, Play Store and One Store. 9to5Mac covered the decision on October 28.
South Korea Fines Apple Over a 26% Third-Party Payment Fee
Apple allowed third-party payment systems in South Korea but charged developers a 26% commission to use them, only four points below its 30% commission. Apple first outlined its plan to allow alternative payment systems in South Korea in January 2022.
Those payments also lacked features that Apple’s own in-app payment includes, such as subscription management. Apple required developers to submit a separate app to use them. The regulator ruled that conditions like these effectively forced developers onto Apple’s own system.
Google, which received the larger penalty, restricted how developers could display prices by payment method. Both companies delayed app reviews without giving specific reasons, and did not clearly answer developer questions about why a review was late or how long it would take. Predictable review timelines are critical to developers’ business operations, the regulator said.
Korean Developers Paid Commission on VAT Until January 2023
Apple was cited for a third violation that Google was not. From July 2015 until January 2023, Apple calculated its 30% commission for overseas developers on the price excluding value-added tax, but for Korean developers on the full consumer price including VAT.
Charging Korean developers on a higher base than overseas developers broke the law’s ban on discriminatory rates, the regulator ruled. Apple promised to fix that setup in November 2022, and the order now requires it to prevent the discrimination from returning.
Apple Disagrees and Is Weighing Its Options
Apple said it disagrees with the decision and is evaluating its options under South Korean law. It added that it has worked with outside developers to enable innovation through the App Store. The orders require Apple and Google to revise their business procedures, including the app market policies that restrict payment choice and the app review process.
Chairperson Kim Jong-cheol said he hopes the sanctions become a turning point toward changes in market structure that developers and users can feel. The regulator will keep monitoring how Apple and Google implement their changes in South Korea. In March, Google announced a revised payment policy that allows external payments and lowers its fees, and Apple briefed the regulator on its own voluntary improvements.
