Key Takeaway
The Korea Communications Commission (KCC) plans to impose fines on Google and Apple, amounting to $50.5 million, for allegedly violating South Korea’s in-app payment law. The companies are accused of abusing their market dominance, coercing developers to use their in-app payment methods, and unfairly delaying app reviews. The KCC aims to promote fair competition in the app store marketplace and expects to finalize the fines after gathering opinions from Google and Apple.
The Korea Communications Commission (KCC), South Korea’s telecommunications regulator, has revealed its plans to levy fines on Google and Apple for breaching the country’s in-app payment law. The fines, totaling up to $50.5 million, are a result of the two tech giants allegedly abusing their market dominance.
Violation of Fair Competition
The KCC accuses both Google and Apple of coercing local app developers to use their own in-app payment methods instead of allowing them to utilize competitors’ payment systems. Furthermore, the companies allegedly engaged in unfair practices by intentionally delaying app reviews to enforce their specific billing systems.
The Implementation of Corrective Measures
The regulatory body has notified Google and Apple about the need to implement corrective measures that will foster fair competition within the app store marketplace. In addition, the KCC highlights Apple’s discriminatory commission charges imposed on domestic app developers in South Korea.
Fines Yet to be Finalized
The KCC is currently gathering opinions from Google and Apple before finalizing the fines. The penalties for Google and Apple are expected to amount to 47.6 billion won ($35.4 million) and 20.5 billion won, respectively.
The Investigation and the In-App Payment Rule
The KCC initiated an investigation in August 2022, focusing on three app stores: Google, Apple, and One Store, a local app store. The investigation aimed to identify potential violations of South Korea’s in-app payment rule, which was enacted in 2021. This rule grants app developers the freedom to use third-party payment options for in-app purchases and prohibits app store operators from compelling developers to use their proprietary systems. Notably, Apple requested developers targeting the South Korean App Store to submit separate binaries for utilizing third-party purchasing systems in 2022.
Prior Incidents of Fines
This is not the first time that Google has faced penalties in South Korea. The country’s Fair Trade Commission (KFTC) previously fined Google 42.1 billion won (nearly $32 million) for preventing developers from releasing mobile video games on a Korean competitor platform known as One Store.
