South Korea Fines Google and Apple a Combined $47.6 Million Over In-App Payments

South Korea's Korea Media and Communications Commission fined Google and Apple a combined 63.71 billion won, about 47.6 million dollars, on Wednesday, October 28. The commission announced the penalties at a plenary meeting at the government complex in Gwacheon, Gyeonggi, after finding that both companies forced app developers onto their own in-app payment systems and unfairly delayed app reviews. The Associated Press reported the same combined figure and the same findings.

Google received the larger fine, 42.9 billion won, reported as about 32 million dollars. Apple was fined 20.81 billion won, reported as about 15.5 million dollars.

What the commission found

The commission found that the two companies abused their superior bargaining position over developers. Developers who wanted to sell digital goods in their apps had to process payments through the companies' own systems. The commission also found that app reviews were unfairly delayed, and that neither company gave developers specific reasons or timelines when a review stalled.

The details differed by company. Google restricted how developers could display prices for each payment method, which made it harder for users to compare the cost of paying another way. Apple required developers who adopted a third-party payment system to upload a separate app, a condition the commission found made outside payment difficult in practice. Developers who did use third-party payment options still faced a 26 percent commission and unreasonable conditions, the commission said.

Apple faced one further sanction. The commission found that Apple discriminated between developers by charging only Korean developers commissions calculated on prices that included value-added tax. Mobile World Live reported that this practice ran between 2015 and 2023.

What the companies must do now

The commission ordered both companies to stop the prohibited practices, improve their procedures and publicly announce the corrective orders. The regulator also ordered both to let South Korean developers use external payment links inside their apps and to improve their app review procedures. Each company must submit a compliance plan within a month of receiving the order, complete the improvements within three months and report back on the results. The commission decided not to file criminal complaints against either company.

Kim Jong-cheol, the chair of the commission, spoke after the vote. "It is late, but I hope this will be an opportunity to correct the unfair practices of app market operators, protect the rights of app developers and users and build a fair and transparent app market ecosystem," he said.

Google said it regrets the outcome. "We regret that the decision does not fully reflect Google's efforts to comply with the law or its contribution to supporting the innovation and global growth of Korean developers," a Google representative said. Apple said it disagrees with the decision and is reviewing how to respond under Korean law.

First use of the 2021 law

The sanctions are the first enforcement of provisions added to South Korea's Telecommunications Business Act in 2021. Those provisions bar app market operators from forcing a specific payment method and from unfairly delaying app reviews. The predecessor Korea Communications Commission began inspecting and investigating the two companies in 2022 and notified them of proposed corrective measures in October 2023. Wednesday's vote closes that process with fines and binding orders.