[Asia Economy Reporter Seulgina Jo] "This is highway robbery." "It is creating an even more unfair environment for developers."
Apple, which has reigned as the king of the application ecosystem and has taken a whopping 30% app commission, is facing intensified controversy over the so-called 'app toll' after expelling a game company that opposed its policy from the App Store. Concerns are mounting that Apple's 'gapjil' (abuse of power) has crossed the line as it monopolizes the global app market along with Google. Their commission policy has also been criticized as "highway robbery" by the U.S. House of Representatives and is currently under investigation by regulatory agencies.
◆ Apple Expels Epic Games from App Store
On the 13th (local time), Apple announced its plan to expel Epic Games, the maker of the popular game FORTNITE, from the App Store for violating the App Store's payment guidelines. This action followed Epic Games' opposition to Apple's app commission policy by implementing an in-app purchase (IAP) feature that allowed users to buy items directly within the game. Epic Games offered users a 20% discount if they purchased items without going through the App Store.
Apple stated in a press release that "Epic Games introduced features that Apple did not review or approve and intended to violate the guidelines regarding in-app purchases." It also added, "Epic Games has benefited from the App Store ecosystem for over 10 years, including tools and testing provided to all developers, and has agreed to the App Store terms and guidelines."
On the same day, Epic Games filed a lawsuit against Apple, escalating the so-called '30% app toll' controversy into a legal battle. Tim Sweeney, CEO of Epic Games, argued, "Apple and Google make enormous profits from device sales, and the 30% commission policy is unjustifiable in any way," adding, "The business model with developers needs to change."
This controversy is not the first of its kind. The current case, which has escalated to expulsion and lawsuits, shows that conflicts between the app market giants in the absolute dominant position and developers are growing.
Apple has enforced a 30% commission on in-app purchases for apps distributed through its App Store. For example, if a consumer pays 10,000 won for a game item, Apple takes 3,000 won. It is estimated that the popular game FORTNITE generates monthly sales of up to $34 million from item sales alone. This is why even the U.S. House of Representatives has criticized the app commission as "highway robbery."
◆ 30% Commission App Market Giants' Abuse of Power Also Criticized Domestically
Furthermore, Google has decided to expand the 30% commission policy to all apps distributed through the Play Store, leading to increasing criticism that the app market giants' abuse of power is excessive.
This not only threatens the survival of app developers but also raises concerns about consumer harm domestically. Last year, the transaction ratio in the domestic app market was close to 90% for Google Play Store and Apple App Store combined. Meanwhile, more than 60% of domestic content companies are classified as small businesses in terms of operating profit, making them vulnerable to the powerful app market giants' commission policies.
Currently, related ministries such as the Ministry of Science and ICT and the Korea Communications Commission are reviewing Apple and Google's app commission policies. At a parliamentary briefing last month, Korea Communications Commission Chairman Sang-hyuk Han responded to criticism that the government was inactive regarding the app toll controversy by saying, "We will review whether there is any violation of the law," adding, "The Fair Trade Commission should examine abuse of superior bargaining position, and the Communications Commission should look into prohibited acts under the Telecommunications Business Act."
Park Sung-joong, a member of the National Assembly's Science, Technology, Information and Broadcasting Committee from the Future United Party, who serves as the committee's secretary, introduced a partial amendment bill to the Telecommunications Business Act on the 11th to prohibit app market operators such as Google and Apple from arbitrarily imposing commissions. Park expressed concern, saying, “Google and Apple's so-called ‘app toll’ is expected to cause significant damage to the domestic mobile content industry.”
Domestic app developers are also preparing collective action. The joint litigation legal platform Angry People is recruiting victims to report Apple and Google's commission terms to the market supervision agency, the Fair Trade Commission. An industry insider pointed out, "Apple exempts some companies like Amazon from the 30% commission policy, showing that app operators with enormous dominance are leading a more unfair environment," adding, "This will be an opportunity for the global platform abuse debate to intensify."
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