Seoul fines tech giants for app rules

South Korean developers now face new costs and process changes after regulators fined Google and Apple. The Korea Media and Communications Commission issued the penalties on Wednesday for abuses in the app store market. The combined fine amounts to 63.7 billion won, or $47.6 million.

The commission spent years investigating the two U.S. tech companies. Their actions allegedly violated a 2021 law that bars app store operators from forcing developers to use specific payment systems. Google received a fine of 42.9 billion won, roughly $32 million. Apple was fined 20.8 billion won, about $15.5 million.

The regulator found that both companies unfairly pushed developers toward their own in-app payment systems. They barred payments through external websites. Although the companies technically allowed third-party payment systems, they charged developers a 26% commission. They also withheld certain features available through their own systems, effectively forcing developers to rely on the in-app options.

The commission ordered both firms to allow South Korean developers to use external payment links within their apps. It also required improvements to app review procedures. Regulators identified instances where companies delayed reviews without explaining reasons or timelines. The commission also accused Apple of charging South Korean developers higher commissions than developers in other regions from 2015 to January 2023.

Apple issued a statement to The Associated Press saying it respectfully disagrees with the decision. The company argued that its current practices comply with South Korean law. Apple stated it is evaluating its legal options. It noted that its in-app payment system allows secure transactions and protects users from fraud and predatory tactics, safeguards that might be lost with alternative methods. Google did not immediately respond to a request for comment.

South Korea became the first country to enforce a law prohibiting app market operators from requiring users to use their own in-app payment systems in 2021. The country has closely scrutinized the business practices of foreign technology companies in its market for years. The commission’s order requires immediate changes to how these platforms operate locally.

The ruling takes effect immediately. Developers must update their apps to include the required external payment links. The companies must adjust their commission structures and review processes to align with the new regulations. No further appeals are scheduled before the initial compliance period begins.