South Korea's Communications Regulator Fines Apple and Google and Orders Payment Reforms Within Three Months

South Korea's broadcasting media and communications commission has fined Apple and Google a combined 63.71 billion Korean won, or about 48 million US dollars, after concluding that both companies used app-store rules to push developers toward their own in-app purchase systems and ordered the two US-based firms to change payment and review practices within three months.

Why 26% External Payment Fees Became the Core Issue

South Korea amended the Telecommunications Business Act in 2021 to ban app-store operators from forcing developers to adopt a specific payment method. Regulators began investigating Apple and Google in 2022, and this fine marks the first enforcement action under that rule.

The commission said that although developers are allowed to use alternative payment systems, the companies still charge a 26% transaction commission, with the rate reaching a maximum of 26%. Developers must also pay the costs of those alternative payment systems. When these fees are added together, using external payments may still be more expensive than using Apple or Google's in-app purchase system, so the commission found that the pricing and conditions prevent meaningful competition.

App Review and Pricing Treatment Also Penalized

Investigators also found that Google restricted developers from showing price differences across payment systems, while Apple required developers using external payment systems to submit apps separately. The regulator said both companies unreasonably delayed app reviews, including failing to provide enough explanation for the delays and the expected completion time.

Apple faced an additional penalty for treating domestic South Korean and overseas developers differently. From July 2015 to January 2023, the commission said Apple charged Korean developers a 30% commission based on the final consumer price after value-added tax, while overseas developers' commissions were calculated on an amount excluding VAT, causing unfair discrimination against local developers.

Three-Month Deadline for Apple and Google Fixes

The South Korean order requires Apple and Google to revise payment policies so developers can offer links to external payment pages inside apps, and commission rates for alternative payment systems must be adjusted to reasonable levels.

• Google must improve user-interface rules for alternative payments;
• Apple must change the requirement that developers using external payment systems submit apps separately;
• Both companies must improve review procedures by telling developers why reviews are delayed and what timeline they can expect.

Google had already said it would adjust its payment policies, including allowing external payment links and reducing some service fees, and the commission is assessing whether those changes meet the order. Apple said it disagrees with the penalty and is reviewing possible legal steps under South Korean law.