South Korea Fines Apple and Google Over App Store Conduct

South Korea’s telecommunications regulator has penalized Apple and Google for violating the country's Telecommunications Business Act. Following extensive investigations that began in 2022, the Korea Media and Communications Commission (KMCC) determined that both tech giants engaged in practices that restricted fair competition within their app stores.

Regulatory Penalties

• Google: Fined KRW 42.9 billion (approximately $32 million).
• Apple: Fined KRW 20.81 billion (approximately $15.6 million).

Key Findings

The KMCC highlighted several areas where the companies' policies breached local regulations:

• Forced Payment Methods: Both companies were found to have pressured developers to use their proprietary in-app payment systems, while blocking external payment options and imposing commissions of up to 26 percent on third-party transactions.
• Opaque Review Processes: The regulator noted that app reviews were frequently delayed without transparent justification, and the companies failed to adequately respond to developer inquiries regarding these bottlenecks.
• Discriminatory Commission Structures: Investigations revealed that Apple calculated commissions for South Korean developers based on the total purchase price including VAT, whereas overseas developers were assessed based on pre-VAT prices.

Required Changes

The KMCC has ordered both companies to modify their business practices to ensure compliance. Specifically, they must allow the use of external payment methods and revise their app review procedures to be more transparent. Furthermore, Apple is under mandate to end the discriminatory commission practices targeting domestic developers. These policy shifts align with similar concessions previously implemented by the companies in the United States and the European Union. Stakeholders can verify these findings through official statements released by the Korea Media and Communications Commission.