South Korea has fined Apple and Google a combined 63.71 billion won, or about $47.6 million, for app store practices that limited payment choices and delayed app reviews. The country’s communications regulator also ordered both companies to change how their app marketplaces operate.
Google received a KRW 42.9 billion, or $32 million, fine. Apple must pay KRW 20.81 billion, or $15.6 million, in penalties. The Korea Media and Communications Commission, known as the KMCC, approved the fines and corrective orders at its 46th plenary meeting Wednesday afternoon.
Regulator says payment choices were not truly open
The KMCC determined that Apple and Google violated South Korea’s Telecommunications Business Act. The decision marks the first enforcement action under provisions added through a 2021 amendment to the law, which prohibits app marketplace operators from forcing developers to use specific payment methods or improperly delaying app reviews.
The regulator found that both companies changed their terms and conditions to allow only their own in-app payment systems and certain designated third-party systems. They restricted other options, including external payments, which meant developers could not freely direct customers to payment services outside the app stores.
Apple and Google technically allowed third-party payments, but both charged a 26% commission for them. That was four percentage points lower than the 30% fee charged for their own in-app payment systems. The KMCC concluded that additional payment processing fees, along with the cost of building and running separate payment systems, left developers with little financial reason to choose the alternative.
The commission said the fee structure and related requirements effectively weakened developers’ ability to choose how customers paid. Google also restricted the display of different prices based on payment methods and applied separate user experience guidelines. Apple required developers that introduced third-party payment systems to submit separate versions of their apps, requirements the regulator considered unreasonable.
“The central issue in this case is whether app developers and users actually have meaningful choices regarding payment methods,” Choi Soo-young, a nonstanding member of the commission, said.
The companies already allow external payments in the US and in the European Union. South Korea’s orders now require them to permit external payment options through links within apps.
New orders cover fees, reviews, and developer treatment
The KMCC began fact-finding investigations and on-site inspections of Apple and Google in 2022. Along with payment practices, it examined how the companies handled app reviews and whether their fee policies treated developers equally.
The regulator found that Google and Apple delayed app reviews without giving clear explanations or expected schedules. It also said the companies did not respond to individual questions about those delays. The new orders require both businesses to revise their app review procedures so developers receive clearer information when reviews take longer than expected.
Google must revise its user experience guidelines. Apple must improve its separate app submission requirements and create measures to prevent “discrimination between domestic and overseas app developers.”
That discrimination finding involved how Apple calculated commissions. Between July 2015 and January 2023, Apple charged overseas developers a 30% commission based on prices excluding value-added tax. For South Korean developers, it applied the same rate to final consumer prices that included value-added tax.
The KMCC said the different calculation methods produced unequal treatment between domestic and foreign developers. Apple’s corrective measures must address that difference and prevent the practice from returning.
Companies face deadlines and follow-up checks
Apple and Google must submit implementation plans within one month of receiving the corrective orders. They must complete the required improvements within three months.
Choi Soo-young said enforcement should not stop with financial penalties. The KMCC plans to monitor whether developers can actually direct users to external payment systems, whether third-party payment fees and requirements become more reasonable, and whether developers that choose alternative payment methods face disadvantages during app reviews.
The penalties came about three years after the former Korea Communications Commission announced plans in October 2023 to impose fines of up to 68 billion won, or about $50.8 million. The final combined penalty is lower than that earlier maximum, but the orders reach beyond the fines by requiring changes to payment links, commission policies, review procedures, and developer treatment.
For app developers, the practical question now is whether the new rules create a real alternative to Apple’s and Google’s payment systems. South Korea’s regulator has made clear that a payment option cannot count as meaningful choice if the fees, technical demands, or review process make it difficult to use.
Based on
- Apple and Google fined in South Korea over app store violations — engadget.com
- South Korea fines Google, Apple $47.6M over app payments – UPI.com — upi.com
- Corea del Sur multa a Google y Apple por prácticas injustas en sus tiendas de aplicaciones | AP News — apnews.com
- South Korea fines Samsung $15.2M over Galaxy gaming ads – UPI.com — upi.com
