"Google's 'In-App Payment' Tyranny? Apple Is Even Worse"

Apple Applies 33% Commission
Higher Than Google's 30%, Sparking Controversy
Discrimination Against Domestic and Foreign Developers Also an Issue
Estimated Unfair Charges Amount to 350 Billion KRW
Costs May Be Passed on to Consumers

VPN applications have been removed from the Chinese app store.

[Asia Economy Reporter Seungjin Lee] As the Korea Communications Commission has launched an investigation into Google for allegedly forcing in-app payments on domestic developers, Apple has taken it a step further. It has been revealed that Apple charged domestic developers on the App Store an in-app payment commission rate of 33%, exceeding the standard 30%. Meanwhile, for foreign developers operating in Korea, Apple charged the standard 30% commission, sparking controversy over discriminatory practices.

"Apple's In-App Payment Commission 33%... Unfair Collection of 350 Billion KRW"

On the 2nd, the Korea Mobile Game Association stated that Apple collects in-app payment commissions from app operators on the App Store based on the amount including value-added tax (VAT) of 10%, rather than the supply price. Apple, which takes a 30% commission on sales, calculates the commission on the amount including VAT rather than the actual sales amount, resulting in an effective commission rate of 33%, according to the association. In contrast, Google applies a 30% commission rate to the supply price excluding VAT on Google Play.

The difference in treatment between domestic and foreign developers is also pointed out as an issue. Foreign developers operating in Korea find it difficult to pay VAT to the Korean government, so Apple pays the VAT on their behalf. Accordingly, Apple charges foreign developers a 30% in-app payment commission on the amount excluding the 10% VAT. Apple claims that it is not their responsibility to ensure developers pay VAT to tax authorities.

Meanwhile, according to association statistics, based on the value of additional services paid through the App Store from 2015 to 2020 amounting to 11.6 trillion KRW, the estimated damage reached 345 billion KRW. The Korea Mobile Game Association recently reported Apple to the Fair Trade Commission, accusing Apple of abusing its dominant position by overcharging commissions.

Google’s Mandatory In-App Payment Policy Controversial... "Apple Goes Further"

In July, Google’s enforcement of a mandatory in-app payment policy sparked heated controversy in Korea, as it applied a 30% commission rate to all developers on its platform. Prior to this, the App Store had already implemented mandatory in-app payments but had largely avoided controversy due to Google Play’s overwhelming domestic app market share of about 74%. However, the App Store effectively charges a 33% commission, which is seen as a heavier burden on domestic developers.

For example, when purchasing a 30,000 KRW item in a mobile game, Google Play charges the developer a 9,000 KRW commission. In contrast, the App Store charges commission on the actual price paid by the consumer including VAT, which is 33,000 KRW, resulting in a commission of 10,890 KRW. When 100,000 items priced at 30,000 KRW are sold, the developer pays 900 million KRW in commissions to Google Play but 1.089 billion KRW to the App Store, creating a commission difference of about 200 million KRW.

The commission difference inevitably shifts the burden onto consumers. Some game and music platforms apply different prices on Google Play and the App Store. Apple allows third-party payments, but in such cases, the payment screen must display messages such as "This app does not support a secure payment system" and "Apple is not responsible for privacy or security," and even then, a 26% commission rate applies.

Meanwhile, according to a report by market research firm Sensor Tower, last year’s revenue generated from the Apple App Store reached 92 billion USD (approximately 109 trillion KRW). Google Play’s revenue was 50 billion USD (approximately 59 trillion KRW), just over half of Apple’s. Sensor Tower estimated the average revenue growth rate of the Apple App Store to be 20.5% from 2020 to 2025, projecting App Store revenue to reach 185 billion USD (219 trillion KRW) by 2025.