Tech giants, Google and Apple, find themselves under the stern gaze of South Korea's telecommunication watchdog, the Korea Communications Commission (KCC). In a bold move announced on Friday, the KCC is poised to slap both companies with fines, potentially reaching a staggering total of $50.5 million. Their transgression? Violating South Korea's stringent in-app payment regulations.
As per the official statement from the KCC, these titans of tech have allegedly leveraged their market power to bully local app creators. The accusation states that both companies nudged developers to adopt their in-house in-app billing methods, sidelining rival payment options. Adding salt to the wound, they are also charged with delaying app reviews as an enforcement mechanism.
The KCC's pronouncement doesn’t stop there. They further highlight Apple's particular practice of charging unequal commissions to domestic app creators in South Korea.
Now, here's the financial breakdown: Google might be staring at a fine of up to 47.6 billion won ($35.4 million), with Apple potentially owing 20.5 billion won. But before these figures are set in stone, both companies will be offered the opportunity to share their perspectives.
This regulatory crackdown can be traced back to August 2022. That's when the KCC initiated its probe into three app store behemoths – Google, Apple, and the domestic contender, One Store. The examination aimed to unearth potential infringements of the in-app payment statute that South Korea adopted in 2021. Notably, this legislation empowers app developers with the choice to use third-party payment gateways for in-app transactions, pushing back against app store bigwigs imposing their proprietary systems.
Ironically, both Apple and Google had publicly committed to adhering to this new rulebook. Yet, in a twist, Apple sought a unique binary from developers in 2022 targeting its South Korean App Store, intending to facilitate third-party purchase mechanisms.
Rewinding further, Google had earlier faced the wrath of South Korea’s Fair Trade Commission (KFTC). The search engine giant was penalized 42.1 billion won (roughly $32 million) for blocking developers from launching mobile games on a Korean rival platform named One Store.
Reacting to this unfolding drama, a Google spokesperson communicated to TechCrunch, emphasizing their consistent collaboration with the KCC. They expressed their dedication to complying with the newly minted laws while guaranteeing a safe and unparalleled user experience. The spokesperson assured that Google would diligently assess the KCC's preliminary notice and strategize their next steps post the final written decision.