Abstract:
The Korean Broadcasting Media and Communications Commission recently issued a decision to impose a total fine of 63.71 billion won, or approximately US$48 million, on Apple and Google. The reason for the fine is that both Apple and Google force developers to use their own payment systems through various restrictions. The committee requires Apple and Google to rectify their payment and review policies within a time limit.
You have to pay a 26% commission even if you don’t use in-app purchases:
South Korea revised the Telecommunications Business Act in 2021, which prohibits app store operators from forcing developers to use specific payment methods. South Korean regulators will investigate Apple and Google's relevant policies starting in 2022, and this is the first penalty since the implementation of the regulations.
According to the investigation, although Apple and Google have allowed developers to use alternative payment systems, they still charge transaction commissions of up to 26%, and developers also need to bear the costs of alternative payment systems. Therefore, the overall cost may be higher than using Apple and Google's in-app purchase systems directly. Regulators argue that this charging mechanism and additional conditions make it difficult for alternative payment systems to effectively compete.
Implementing differential treatment policies affects developers:
Regulatory agency investigations also show that Google restricts developers from displaying prices for different payment systems, while Apple requires developers who use alternative payment systems to submit applications separately. Both companies were also found to have unreasonably delayed their reviews, including failing to adequately explain the reasons for delays and expected completion times.
Apple was also punished for using different commission calculation methods for local and overseas developers in South Korea. The regulator said that between July 2015 and January 2023, Apple charged Korean developers a 30% commission based on the final consumer price including VAT, while overseas developers were not calculated based on the amount of VAT, which resulted in unfair differential treatment for Korean developers.
Require Apple and Google to complete rectifications within 3 months:
South Korea requires Apple and Google to improve their payment policies, allowing developers to provide links to external payment pages in their apps, and to reasonably adjust the commission rates for using alternative payment systems.
The rectification requirements include: Google needs to improve the user interface rules for alternative payments, Apple adjusts the requirements for developers to submit applications separately when accessing alternative payment systems, and both companies must improve the review process and explain to developers the reasons for review delays and follow-up schedules.
Google has previously announced that it will adjust its payment policy, including allowing external payments and reducing some service fees. South Korean regulators are evaluating the actual effects to see whether Google's rectifications meet the requirements. Apple issued a statement that it disagreed with the penalty decision of the Korean regulatory agency and was evaluating subsequent options in accordance with Korean law.
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