South Korea app store fines totalling 63.7 billion won ($47.6 million) were imposed on Google and Apple on Wednesday, after the country’s communications watchdog found both companies forced software developers to use proprietary payment systems and arbitrarily delayed application reviews in violation of national competition rules.
Key points
- The Korea Media and Communications Commission fined Google 42.9 billion won and Apple 20.8 billion won.
- Regulators ruled that a 26 per cent fee on third-party billing and a ban on external web links circumvented a 2021 competition law.
- The commission ordered both firms to permit external payment links and overhaul opaque app review procedures.
- Apple said it complied with local law and is considering legal action, while Google did not immediately comment.
The penalties conclude a multi-year investigation by the Korea Media and Communications Commission into how the two Silicon Valley companies run mobile software distribution in the country. Regulators ruled that Google and Apple abused their market dominance by shutting out genuine payment alternatives, despite legal reforms designed to dismantle platform monopolies.
Under the decision, Alphabet subsidiary Google faces a penalty of 42.9 billion won ($32 million). Apple was fined 20.8 billion won ($15.5 million). Alongside the financial penalties, the regulator issued corrective orders requiring both platform operators to permit developers to direct users to outside web links for purchases, and to overhaul their app review processes.
Circumventing the 2021 mandate
South Korea became the first jurisdiction in the world to challenge big tech platform fees through national legislation in 2021. The National Assembly amended the Telecommunications Business Act to bar app store operators from compelling developers to use proprietary billing services.
In response to that law, Google and Apple modified their terms in South Korea to permit alternative in-app billing systems. They also withheld select platform features from apps using alternative payment engines.
The commission concluded that these terms made outside billing commercially unviable. By pairing high commissions with functional restrictions and prohibiting developers from placing links to lower-cost websites within their apps, the regulator found the companies steered developers back to first-party billing.
Unexplained review delays and fee discrepancies
Beyond billing mechanics, the regulatory inquiry examined developer treatment during the App Store and Google Play software review processes. Officials identified multiple cases where app updates and submissions were stalled indefinitely without clear explanations or projected completion dates.
The regulator stated that withholding justifications for review delays left local studios with little recourse, creating operational uncertainty for digital businesses dependent on timely software releases.
The watchdog also found that Apple had charged domestic developers higher commission rates than their overseas competitors over an eight-year span. Between 2015 and January 2023, South Korean developers paid elevated rates to distribute their software, an arrangement that regulators cited as discriminatory against local businesses.
Industry impact and company response
The decision strikes at the core of the mobile app economy, where platform commissions generate tens of billions of dollars annually for Apple and Google. Regulatory pressure on app store fees has widened globally, with the European Union and United States authorities pursuing similar inquiries into developer restrictions and anti-steering rules.
Apple rejected the regulator’s findings. A company spokesperson told The Associated Press that Apple disagreed with the ruling and is reviewing its legal options. Apple stated that its operating policies comply with South Korean law and that its integrated billing infrastructure offers critical fraud prevention safeguards for consumers.
Google did not immediately reply to requests for comment following the announcement.
Both companies now face mandatory compliance deadlines to adjust their South Korean merchant agreements or lodge formal appeals through the South Korean courts.
