Google, Apple face fines in South Korea for breaching in-app billing rules

South Korea’s telecommunication regulator, the Korea Communications Commission (KCC), said Friday that it plans to levy fines on Google and Apple, which could total up to $50.5 million, for violating the country’s in-app payment law. 

According to the KCC statement, the two Big Tech giants abused market dominance to force local app developers to use their in-app payment methods rather than competitors’ payment systems and unfairly delayed app reviews to enforce the specific billing system. 

The commission informed Google and Apple of the implementation of corrective measures to promote fair competition in the app store marketplace. The watchdog also mentioned in the statement that Apple discriminatorily charged commissions to domestic app developers in South Korea.

The KCC will finalize the fines for Google and Apple, up to 47.6 billion won ($35.4 million) and 20.5 billion won, respectively, after collecting opinions from Google and Apple. 

The Korean watchdog launched its investigation into the case of three app stores — Google, Apple and One Store, a local app store — in August 2022 over potential violations of the country’s in-app payment rule that South Korea passed in 2021.

In 2021, South Korea enacted a new telecommunication law that allows app developers to use third-party payment options for in-app purchases and bans app store operators from forcing them to use their own systems. Apple and Google agreed to abide by these rules. However, Apple asked developers targeting the South Korean App Store to submit a separate binary for using third-party purchasing systems in 2022. 

Earlier this year, South Korea’s Fair Trade Commission (KFTC) fined Alphabet’s Google 42.1 billion won (nearly $32 million) for blocking developers from releasing mobile video games on a Korean competitor platform, One Store.

“We have continued to work closely with KCC to demonstrate how we are complying with the new law whilst ensuring that through our alternative billing, we continue to provide a safe and high-quality experience for all,” a spokesperson of Google told TechCrunch. “What KCC has shared today is the ‘pre-notice’ and we will carefully review and submit our response. Once the final written decision is shared with us we will carefully review to evaluate the next course of action.”

Apple said it disagrees with KCC’s latest announcement. “We disagree with the conclusion made by the KCC in their Examiner’s report, and believe the changes we have implemented to the App Store comply with the Telecommunications Business Act. As we have always done, we will continue to engage with the KCC to share our views,” Apple said in its statement.

Updated with comments from Google and Apple. 

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