MyTechDailyNews General: South Korea Fines Apple and Google Over App Payment Rules
A decision from South Korea’s media and telecommunications regulator has put Apple and Google — companies based in the United States — on a three-month clock. The Korea Communications Commission concluded that their app-store payment policies effectively pushed developers toward in-house billing systems, and it imposed a combined fine of KRW 63.71 billion, about US$48 million.
At the center of the case is not simply whether developers may choose another payment processor. The regulator found that the practical cost and process rules could still make alternative payments harder to use than the platforms’ own in-app purchase systems.
Background: a 2021 rule change and investigations that began in 2022
South Korea changed its Telecommunications Business Act in 2021 to block app-store operators from forcing developers to use a specific payment method. Beginning in 2022, regulators examined whether Apple and Google respected that standard through their fee structures, disclosure rules, submission requirements, and review timelines. The latest fine is the first penalty issued after the rule took effect.
Why “alternative payment” did not automatically create competition
The investigation concluded that Apple and Google had opened the door to alternative payments, but had left several economic and procedural obstacles standing. Both were found to keep a 26% transaction commission, and the framework still allowed rates at the level of up to 26%. Developers also had to absorb the cost of using the alternative payment system itself. When those layers were added together, regulators concluded that the total cost could still be higher than adopting Apple or Google in-app purchase.
That outcome mattered because the regulator’s concern was whether developers could make a real choice. A nominal opening was not enough if pricing and conditions left the alternative payment route commercially disadvantaged.
Review delays, price displays, and separate submissions
Beyond fees, the case touched the way developers interact with each store. Regulators found that Google limited developers’ ability to display prices for different payment systems. Apple, in turn, required developers using alternative payments to submit their apps separately. Both companies were also cited for unreasonable delays in review, with regulators pointing to insufficient explanations of why reviews were taking longer and when developers could expect a decision.
These issues shaped the penalty because they concerned the day-to-day mechanics of compliance. Even if a developer could technically use another payment processor, restrictive presentation rules, extra submission steps, and slow reviews could reduce the practical value of that choice.
Apple’s local versus overseas commission calculation
Apple received an additional finding related to different treatment of South Korean local developers and overseas developers. The regulator stated that from July 2015 to January 2023, Apple charged a 30% commission for Korean developers based on the final consumer price including value-added tax, while overseas developers were not charged under the same VAT-based calculation. For local developers, that method created an unequal burden.
The distinction is important because it moves the case from a general platform-fee debate to a concrete fairness issue: developers facing the same market could be treated differently depending on where they were located and how tax-inclusive prices were handled.
Three-month remediation: what Apple and Google must address
The regulator’s remediation order gives Apple and Google three months to adjust policies. The core requirements are to allow in-app links to external payment pages and to make commission rates for alternative payments reasonable.
- Google must improve user-interface rules for alternative payment options.
- Apple must revise the separate-submission requirement that applied to developers using alternative payments.
- Apple and Google must improve review procedures and communicate reasons for delays and expected timelines.
Google had already announced payment-policy adjustments, including support for external payments and lower fees in certain cases. The regulator is evaluating whether those changes produce the intended effect. Apple publicly disagreed with the decision and said it was reviewing its options under South Korean law.
Table: the two companies side by side
| Issue | Apple | |
|---|---|---|
| Fine framework | Part of combined KRW 63.71 billion penalty | Part of combined KRW 63.71 billion penalty |
| Payment choice | Alternative payments allowed but found difficult to compete because of fees and submission rules | Alternative payments allowed but found difficult to compete because of fees and price-display limits |
| Commission finding | 26% commission remained; up to 26% level still applied; developers paid alternative processing costs | 26% commission remained; up to 26% level still applied; developers paid alternative processing costs |
| Local-versus-overseas calculation | 30% VAT-inclusive calculation for South Korean local developers from July 2015 to January 2023, unlike overseas developers | No separate finding in this article |
| Remediation task | Adjust separate submission rule, enable external payment links, review commission levels | Improve alternative-payment UI rules, enable external payment links, review commission levels |
| Current stance | Disagreed with penalty; evaluating legal options | Changes announced earlier; regulator assessing real effect |
FAQ: key points in plain language
What was punished?
The Korea Communications Commission found that Apple and Google used restrictions that effectively forced developers to use their own payment systems. The fine is KRW 63.71 billion combined, or about US$48 million.
Why does the 26% rate matter?
The law prohibits forcing a specific payment method, but regulators concluded that a 26% commission, an up-to-26% framework, and developers’ own alternative payment costs could make outside systems more expensive than in-app purchase.
What must change within three months?
Developers must be able to link to external payment pages inside apps, and alternative-payment commissions must be reasonably adjusted. Google must improve interface rules, Apple must change separate submission requirements, and both must explain review delays and timelines.
Has everyone already complied?
No. Google’s earlier announced changes are being assessed, while Apple has disagreed and is reviewing options under South Korean law.
Common misconceptions
- “Opening the store to other payments solves the issue.” The case says cost and procedural rules can still prevent real competition.
- “Only commission rates were involved.” Price-display limits, submission steps, and review delays were also part of the findings.
- “The penalty was only about Apple’s local VAT issue.” The local-versus-overseas commission calculation was Apple-specific, but the broader payment, submission, review, and disclosure issues also involved Google and Apple.
- “Both companies have accepted the result.” Apple disagreed with the penalty; Google’s remediation was already partly announced but still under evaluation.
Action advice
Developers and teams publishing to South Korean app stores should treat this as a practical checklist, not just a news item. Review payment options, total transaction costs, price presentation, submission steps, and review-status communications against the three-month remediation direction.
Readers following the story can focus on three signals: whether external payment links are made available, whether commission levels for alternative payments are adjusted in a way that changes developer behavior, and whether review delays are explained with clearer timelines.
The final takeaway is simple: the regulator’s concern was not only about whether a developer could pick another payment processor, but about whether the platform made that choice usable. South Korea has now required both Apple and Google to show that the rules work in practice, not just on paper.