South Korea Fines Google and Apple $47.6 Million Over App Store Payment Abuses

South Korea's telecommunications regulator has fined Google and Apple a combined 63.7 billion won ($47.6 million) for abusing their dominant market positions. The Korea Media and Communications Commission (KMCC) issued the penalties on Wednesday, concluding a three-year investigation into the companies' app store payment practices.[1][2][3]

The ruling marks the first major enforcement of a 2021 amendment to the country's Telecommunications Business Act. The legislation specifically prohibits app market operators from forcing software developers to use proprietary billing systems to process digital transactions.[2][3][4]

Under the finalized sanctions, Google faces a 42.9 billion won ($32.0 million) penalty, while Apple must pay 20.8 billion won ($15.5 million). Regulators also issued corrective orders requiring both companies to overhaul their payment structures and app review procedures.[1][3][5]

"A fair and sustainable app market ecosystem can be achieved through a cooperative and mutually beneficial relationship between app market operators and developers," KMCC Chairperson Kim Jong-cheol said during the plenary session in Gwacheon.[3][4]

Restricting Developer Choice

The KMCC investigation found that while Google and Apple technically permitted third-party billing, they imposed restrictions that made those alternatives commercially unviable. Developers utilizing outside payment processors still faced a 26 percent commission fee from the tech giants.[1][2][3]

In addition to the high commission rates, developers had to cover their own payment processing and operational costs. The regulator concluded that these financial burdens left software creators with no meaningful choice but to adopt the companies' proprietary in-app billing systems.[2][3]

The commission also noted that both companies prohibited developers from offering transactions completed on external websites. Google restricted how developers could display prices across different payment methods, while Apple required developers to submit entirely separate applications if they wanted to offer third-party billing.[2][4]

Regulators classified this conduct as a "very serious violation," citing widespread harm to both software creators and consumers. The KMCC increased the baseline fines for these forced payment practices by 20 percent, noting that the companies failed to correct their behavior despite knowing they were under active investigation.[2][5]

Unequal Commissions and Review Delays

Beyond the payment system restrictions, the KMCC penalized Apple for applying discriminatory commission rates. Between July 2015 and January 2023, the company charged South Korean app developers higher effective commission rates than their overseas counterparts.[1][2][3]

Apple calculated its standard 30 percent commission based on the final consumer price for South Korean developers, which included a 10 percent value-added tax. For foreign developers, the company calculated the fee based on the price before taxes, resulting in a higher financial burden for local creators.[2][3]

Apple received a 20 percent reduction in its penalty for this specific violation after voluntarily revising its policy in early 2023. However, the regulator maintained the core finding that the historical practice violated domestic telecommunications laws.[2][5]

The investigation also revealed that both Google and Apple unfairly delayed app reviews. The companies frequently failed to provide developers with specific reasons for the delays or clear timelines for when the review process would resume, hindering developers' ability to update and launch software.[1][2][3]

Mandating External Links

The KMCC's corrective orders require Google and Apple to fundamentally alter how they process app store transactions in South Korea. Both companies must now allow developers to include links directing users to external payment websites directly within their applications.[1][3][4]

Google is required to revise its internal guidelines regarding the user experience for third-party payments. Apple must eliminate its rule that forces developers to release a standalone version of their app in order to provide customers with alternative payment options.[2][4]

The tech giants have one month from receiving the written corrective orders to submit detailed compliance plans to the regulator. They must fully implement the required changes to their payment structures and app review procedures within three months.[1][3][5]

The regulator opted to issue administrative fines and corrective orders rather than pursuing criminal complaints against the two companies. The KMCC plans to issue the formal written decisions in November and will actively monitor the companies' compliance with the new mandates.[2][4][5]

Setting a Regulatory Precedent

South Korea has consistently scrutinized the business practices of foreign technology companies operating within its borders. In 2021, the nation became the first in the world to pass legislation explicitly banning app market operators from mandating the use of their own in-app payment systems.[1][2]

The initial notification of these proposed fines occurred in October 2023 under the KMCC's predecessor, the Korea Communications Commission. The final ruling faced repeated delays due to administrative disruptions and organizational restructuring within the South Korean government.[2][3]

The enforcement action sets a concrete precedent for how national regulators can apply financial penalties to enforce open payment ecosystems. The three-month implementation window will serve as a critical test of whether the mandated changes produce actual shifts in the mobile software market.[3][5]

The ultimate impact of the 63.7 billion won penalty relies on the companies' willingness to adjust their global infrastructure for a single market. The KMCC has indicated that it will maintain strict oversight to ensure the tech giants do not introduce new barriers to third-party billing.[2][5]

Analysts note that the effectiveness of the sanctions will depend less on the monetary size of the fines and more on the structural changes to the payment policies. The combined $47.6 million penalty represents a fraction of the global revenue generated by the two app stores.[3][5]