Google to be fined 47.5 billion, Apple 20.5 billion planned
The Korea Communications Commission (KCC) will impose a fine bomb worth up to 68 billion KRW on Google and Apple for their abusive practice of forcing in-app payments.
On the 6th, the KCC announced that it has notified corrective measures to Google and Apple based on the results of a fact-finding investigation into unfair practices by app market operators.
The prosecution has launched an investigation into Apple on suspicion of overcharging thousands of billions of won in in-app payment fees from domestic application developers. The photo shows the Apple Store Gangnam in Seoul on the 18th. Photo by Jinhyung Kang aymsdream@
The KCC determined that app market operators allowing only in-app payments on their own platforms and refusing the registration and updates of apps using external payment methods such as web payment outlinks violated the so-called "In-App Payment Forced Prohibition Act (Telecommunications Business Act)" and began the fact-finding investigation on August 16 last year. The results were released after one year.
When Google forced in-app payments with commissions as high as 30%, the National Assembly enacted the In-App Payment Forced Prohibition Act in 2021. However, Google and Apple sought to nullify the law. Although they allowed third-party payments outside of in-app payments, they cunningly set fees as high as 26%, nearly as much as the 30% in-app payment fee. Additionally, Google took a strong stance by threatening to remove apps that did not comply with its payment policy. For example, last year, when Kakao announced web payment outlinks for its emoticon service, which was cheaper than in-app payments, Google blocked the KakaoTalk app update.
The KCC viewed the act of forcing a specific payment method as a serious issue that could undermine the purpose of the In-App Payment Forced Prohibition Act, which aims to promote fair competition in app markets. It also judged Apple’s discriminatory imposition of fees only on domestic app developers as unfair discrimination and notified corrective measures accordingly.
The KCC plans to finalize corrective orders and impose fines totaling up to 68 billion KRW, including 47.5 billion KRW on Google and 20.5 billion KRW on Apple, after hearing the operators’ opinions on the corrective measures and going through KCC deliberation and resolution procedures.
The KCC stated, "This corrective measure is significant in that it strictly sanctions the unfair use of bargaining power by giant platform operators like Google and Apple, fostering a healthy environment in the app market and contributing to the establishment of a fair and open mobile ecosystem." It added, "Since forcing payment methods by app market operators abusing their bargaining position can adversely affect the entire related mobile ecosystem, we plan to create a healthy app ecosystem and ensure users’ real choice rights through strict law enforcement."
The KCC also stated that it will continue to strictly enforce laws without discrimination between domestic and foreign operators if platform operators who have dominated the digital platform market violate laws to maintain or strengthen their dominant position. Furthermore, the KCC will continuously monitor the market for illegal acts that may hinder fair competition or harm users’ rights and interests.
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