Google, Apple face $50.5M fine for unfair practices

The Korea Communications Commission (KCC) plans to fine Google and Apple a combined 68 billion won ($50.5 million) for forcing Korean developers to use their in-app payment systems.

The Korea Communications Commission (KCC) plans to impose Google and Apple with a combined 68 billion won fine for their unfair business practices in Korea, it announced on Friday. [SHUTTERSTOCK]

A Korean regulator will slap Google and Apple with a combined 68 billion won fine ($50.5 million) for their unfair business practices forcing Korean developers to utilize their in-app payment systems.

The Korea Communications Commission (KCC) plans to impose Google with a fine of 47.6 billion won and Apple with 20.5 billion won for violating the country’s in-app payment regulations after an initial investigation was launched on Aug. 16, last year.

“The proposed penalty will contribute to safeguarding the market by correcting malpractices of large-scale platform operators like Google and Apple, that have used their positions unfairly,” KCC said in a statement.

In 2020, Google revised its policy of making it mandatory for all app developers to use in-app payment methods, charging 30 percent commission on purchases. Before, the policy only applied to game-related app developers.

To protect local app developers from the hike, the National Assembly passed a bill to ban mandatory in-app payments the following year, setting the first global precedent for such a regulation on in-app billing policies of Apple and Google.

But Google and Apple soon found a loophole in the revised Telecommunications Business Act, and acquired the app that utilizes a third-party app payment method linked to their billing systems, and applied the same rules from before — charging extra commission fees to the developers.

Google went to great lengths to bar those who used external payment methods from updating their apps by infinitely prolonging the process in April 2022. Two months later, it even warned that it will begin to remove the apps which don’t comply with the procedures.

Following the announcement, an array of local content service providers including Naver and Kakao saw a price hike on the Google Play Store to make up for the extra charge, which has led the Korea Publishers Association to file a complaint to the KCC requesting a probe into the matter.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]