South Korea fines Google and Apple $47.6m over app store payments

South Korea has fined Google and Apple a combined 63.7bn won ($47.6m). The regulator says they forced app developers onto their own payment systems and delayed app reviews without explanation. Both must now let Korean developers link to outside payment options inside their apps.

The Korea Media and Communications Commission (KMCC) fined Google 42.9bn won ($32m) and Apple 20.8bn won ($15.5m) on Wednesday. Kim Tong-hyung reported the decision for The Associated Press. It is the first penalty under a 2021 law that bans app stores from forcing a payment system on developers, Electronic Times reported.

A 26% fee on the alternative

On paper, both companies let developers use third-party payment systems inside their apps. But they charged a 26% commission on those payments, the regulator said. They also blocked links to outside websites and held back some features. That left developers with little real choice.

Google also limited how developers could show prices for different payment methods. Apple made developers submit a separate app to offer third-party payments, according to Electronic Times.

Apple was also fined for charging Korean developers more than foreign ones. From July 2015 to January 2023, it took its cut from Korean prices including VAT. For overseas developers, it used prices before VAT.

“I hope this sanction will be a turning point for an app market structure that developers and users can feel,” KMCC chair Kim Jong-cheol said, according to Electronic Times (translated from Korean).

One month to send a plan

Google and Apple have one month to submit a plan and three months to make the changes, iNews24 reported. The orders cover external payment links and clearer reasons for review delays. Apple must also treat Korean and foreign developers equally. The law does not set the commission rate, which is left to the stores and developers.

In 2023, the regulator had floated fines of up to 68bn won. The final amounts are based on the companies’ related revenue in Korea, iNews24 said.

Apple disagrees

Apple told the AP it respectfully disagrees with the decision. It said its practices comply with Korean law and that it is weighing its legal options. It also said its payment system protects users from fraud.

Google said it regretted the fine, Yonhap reported. It said its compliance work and support for Korean developers were not fully reflected. It will review the written decision before deciding how to respond.

App store payment rules are under pressure elsewhere too. This month, an Australian court ordered Apple to open the iPhone to rival app stores. The EU is in talks with Google after a €890M DMA fine. In the UK, a class action says Google overcharged Play Store users.