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South Korea fines Google and Apple 63.7 billion won over app store practices and orders external payment links
South Korea's regulator fined Google 42.9 billion won and Apple 20.8 billion won, a combined 63.7 billion won or about 47.6 million dollars, for abusing app market dominance. Third-party payments were allowed but made costly. Both must allow external payment links. Apple disagrees.
R
4 min
South Korea's media and telecommunications regulator fined Google and Apple a combined 63.7 billion won, about 47.6 million dollars, on Wednesday, 28 October, for abusing their dominance in app store markets. Google was fined 42.9 billion won, about 32 million dollars, and Apple 20.8 billion won, about 15.5 million dollars. The Korea Media and Communications Commission also ordered both companies to allow South Korean developers to use external payment links inside their apps and to improve their app review procedures.
What the regulator found
The case rests on a law that South Korea passed in 2021, which made it the first country to enforce a ban on app market operators requiring developers to use their own in-app payment systems. The regulator found that the companies pushed local developers towards their own payment systems and barred payments through external websites.
It concluded that although the two firms in theory allowed rival payment systems inside apps, in practice they charged commissions of 26 per cent and withheld some features that were available through their own systems, so that using the alternatives was too costly. The regulator also found that the companies delayed reviews of apps without clearly telling developers why, or when the review would resume. In addition, it accused Apple of charging South Korean developers higher commissions than developers elsewhere between 2015 and January 2023.
| Company | Fine in won | Fine in dollars |
|---|---|---|
| 42.9 billion | about 32 million | |
| Apple | 20.8 billion | about 15.5 million |
| Total | 63.7 billion | about 47.6 million |
What the companies must do
Both must let South Korean developers include links to external payment options in their apps, and both must improve the way in which they review apps, so that developers know the reasons for delays and the expected timing. The orders cover the practices that the regulator found, and developers will be able to offer users a way to pay that does not go through the app store's own system and its commission.
The companies' responses
Apple said that it respectfully disagrees with the decision and believes that the changes it has implemented comply with the Telecommunications Business Act. It said it is evaluating its legal options. Neither Google nor Apple had responded to requests for comment when the first reports were published, and Google's response to the final decision was not found in the reports.
The regulator first announced in 2023 that it intended to fine the two companies, and it said then that the penalties could total up to about 50 million dollars. The final amount is of the same order. The case has taken years, and the 2021 law has been in force since then.
Most apps on smartphones are downloaded through one of two stores, and the commission that the store charges on purchases made in an app is a large cost for developers. A payment link that takes the user to the developer's own site can avoid that commission, which is why the right to display such links has been at the centre of disputes in several countries. Developers argue that the commission raises the prices that users pay, and the companies say that the fees pay for the security, the tools and the reach that the stores provide.
| Year | Development |
|---|---|
| 2015 to January 2023 | Period in which the regulator says Apple charged Korean developers higher commissions than developers elsewhere |
| 2021 | South Korea enforces the first law banning compulsory in-app payment systems |
| 2023 | The regulator announces its intention to fine the two companies |
| 28 October 2026 | Final fines of 63.7 billion won and orders to allow external payment links |
For developers, the practical effect is that they will be able to offer users a link to pay on their own website from inside the app, as long as the companies carry out the order. The companies will have to say how the links will work and what fee, if any, they will charge on them, and the regulator's finding that a commission of 26 per cent made the alternatives too costly will be the test for any new fee.
South Korea is one of several countries where regulators are looking at app store rules. In India, the Competition Commission has also examined the way Google's Play Store handles payments in apps. The Korean decision is a new data point for developers and regulators elsewhere, since it shows that a regulator can find that permitting alternatives on paper does not satisfy a law if the cost makes them unusable in practice.
The decision can be challenged. Apple has said it is considering its legal options, and the final outcome may depend on what courts decide.
R
4 min
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