South Korea is considering fining Google and Apple up to 68 billion won ($57.5 million) for allegedly breaching mobile payment rules. This is not the first time that South Korea has taken action against these tech giants. In the past, South Korea’s antitrust regulator has fined Google for blocking customised versions of its Android operating system (OS) and for squeezing local rivals. South Korea’s telecommunications regulator said today that it is imposing the fine because both brands violated local laws. In this article, we will discuss the current situation and the previous actions taken by South Korea against Google and Apple.
South Korea’s Allegations Against Google and Apple
South Korea’s telecommunications regulator is considering fining Google and Apple for allegedly breaching mobile payment rules. The regulator claims that Google and Apple have abused their dominant positions in the app market. It claims that both companies force developers to use their payment systems, which charge a commission of up to 30%. This practice is known as the “in-app purchase” system. It has been a point of contention between app developers and tech giants for years. South Korea’s regulator claims that this practice is anti-competitive and harms users by raising prices.
The Korea Communications Commission (KCC) pointed out in a statement that this system causes unfair delays in app review. KCC said it is currently notifying the two companies to take corrective measures and will review the fines.
Google and Apple respond
According to Reuters, Google said in response that “the KCC issued a ‘pre-notification’ today, and we will carefully review and submit a response. If we receive a final written decision, we will evaluate the next course of action.”
Apple also stated in its response to Reuters, “We do not agree with the conclusions made by KCC in the report. The modifications we have implemented on the App Store comply with the relevant provisions of South Korea’s Telecommunications Business Law. We will continue to stay in contact with KCC and will be available at any time to share ideas”.
South Korea’s KCC stated in August last year that it planned to launch a probe into app store operators. At the time, it mentioned Apple Store, Google PlayStore and One Store. This is because it believes that they were violating in-app payment laws.
Last year, South Korea passed an amendment to the Telecommunications Business Act. The Act prohibits major app store operators such as Google and Apple from forcing software developers to use their payment systems. The enforcement of this Act took effect back in March. For this reason, the KCC expect all tech brands to comply with the law.
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The KCC said in a statement that it had conducted an inspection since May 17 to determine whether Google, Apple and the One Store violated the revised Telecommunications Business Act. In the end, it concluded that all three app stores had violated the rules.
Previous Actions Taken by South Korea Against Google
South Korea’s antitrust regulator has fined Google for blocking customised versions of its Android operating system (OS) and for squeezing local rivals. In 2021, South Korea’s antitrust regulator fined Google $177 million for blocking customised versions of its Android operating system (OS).
The regulator claimed that Google’s contract terms with device makers amounted to an abuse of its dominant market position that restricted competition in the mobile OS market. Google said it intends to appeal the ruling, saying it ignores the benefits offered by Android’s compatibility with other programs and undermines advantages enjoyed by consumers.
Earlier this year, South Korea’s Fair Trade Commission (KFTC) fined Google $32 million for blocking developers from releasing mobile video games on a Korean competitor platform called One Store. The KFTC claimed that Google allegedly required Korean video game companies to exclusively release their new games in the Play Store from June 2016 to April 2018.
This meant that Google banned the local game makers from releasing their content on One Store. It did this in return for offering Google’s in-app exposure and further support for global expansion. Google said that it had cooperated diligently with the KFTC’s investigation and deliberation process for the past five years and believed that there had been no violation of the law.
Conclusion
South Korea is considering fining Google and Apple up to 68 billion won ($57.5 million). The fine is for allegedly breaching mobile payment rules. This is not the first time that South Korea has taken action against these tech giants. In the past, South Korea’s antitrust regulator has fined Google for blocking customised versions of its Android operating system (OS) and for squeezing local rivals.
The regulator claimed that Google’s contract terms with device makers amounted to an abuse of its dominant market position. It believes this restricts rivalry in the mobile OS market. Google said it intends to appeal the ruling. It says the regulator ignores the benefits offered by Android’s compatibility with other programs. Google believes this undermines the pros that users of the system enjoy.
South Korea’s regulator claims that Google and Apple have abused their top positions in the app market. This is by forcing developers to use their payment systems, which charge a commission of up to 30%. This practice is known as the “in-app purchase” system. It has been a point of debate between app developers and tech giants for years.
What do you think about the decision by the KCC to fine Apple and Google? Is the action of the regulatory body justified? Should Apple and Google stop to force developers to use their in-app payment system? Let us know your ideas in the comment section below.
