SEOUL – South Korea’s media regulator on Oct 28 fined Google and Apple a combined 63.71 billion won (S$61 million) for effectively forcing app developers to use their in-app payment systems and unfairly delaying app reviews, issuing its first sanctions under a 2021 law banning such practices.
The Korea Media and Communications Commission (KMCC) imposed fines of 42.9 billion won on Google and 20.81 billion won on Apple, ending a regulatory process that had dragged on for more than three years since the penalties were first proposed.
The ruling follows an investigation into whether the US tech giants violated South Korea’s amended Telecommunications Business Act, which prohibits app store operators from forcing developers to use specific payment methods or unfairly delaying app reviews.
According to the KMCC, both companies technically allowed third-party billing, but imposed fees and restrictions that made alternatives commercially unattractive.
Developers using third-party payment systems still faced a 26% commission, on top of their own payment processing and operating costs. Google restricted how developers could display prices across payment methods, while Apple required separate app submissions for third-party billing.
Both companies also restricted payment options outside their apps.
The regulator concluded that these practices left developers with little meaningful choice but to use Google and Apple’s own billing systems.
It classified the conduct as a “very serious violation”, citing damage to competition and widespread harm to developers and consumers.
The KMCC also found that both companies unfairly delayed app reviews without adequately explaining the reasons or providing clear completion timelines, even when developers requested them.
Apple faced an additional penalty for charging South Korean developers higher effective commissions than their overseas counterparts.
From July 2015 to January 2023, Apple calculated its 30% commission on tax-inclusive prices for local developers, while applying the same rate to pre-tax prices for overseas ones.
Apple attributed the discrepancy to changes in Korea’s value-added tax law, but the regulator rejected that explanation, saying the company could have applied consistent calculation methods across markets.
The practice generated an estimated 149.6 billion won in additional commissions for Apple, according to the KMCC.
In determining the penalties, the regulator increased fines for forced payment practices by 20% because the companies failed to correct their conduct despite knowing they were under investigation.
Apple received a 20% reduction in its penalty for discriminatory commissions after voluntarily revising its policy.
The KMCC also ordered Google and Apple to end the violations, revise their business practices, publicly disclose the corrective orders and submit compliance plans and reports.
The sanctions come after years of regulatory delays. The KMCC’s predecessor, the Korea Communications Commission, proposed fines totalling 68 billion won in October 2023, but a final ruling was repeatedly postponed amid administrative disruptions and organisational changes.
The KMCC plans to issue written decisions in November and monitor the companies’ compliance.
It will also examine Google’s revised payment policies announced in March, which include allowing purchases through external websites and reducing developer fees.
KMCC chair Kim Jong-cheol acknowledged the prolonged delay, saying the regulator bore responsibility for the time lost, regardless of the circumstances.
“I hope these measures will mark a turning point, bringing meaningful changes to the market that app developers and end users can actually feel,” he said.
“We will continue to enforce the law fairly, without discriminating between domestic and foreign companies,” he added. THE KOREA HERALD/ASIA NEWS NETWORK
