Apple and Google run the risk of being slapped with millions of dollars in fines if they are found guilty of monopolistic practices pertaining to their respective app stores, a Korean regulatory body announced on Friday (via Reuters).
According to the statement issued by the Korea Communications Commission (KCC), Apple and Google have allegedly misused their dominant position in the industry by restraining the choices of accepted payment methods available for third-party developers, in addition to repeated and lengthy delays when it comes to app submission reviews.
According to Reuters, the KCC has warned Apple and Google to swiftly rectify the situation by allowing alternative payment methods, or else it will be left with no choice but to sign hefty fines on both companies. The KCC is calling for a fine worth $35 million on Google, whereas Apple would be fined the equivalent of $15 million.
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Apple and Google issued independent statements to Reuters in which they denied the KCC’s allegations while promising to communicate and liaise with the regulator over the necessary steps to be taken moving forward.
What KCC has shared today is the ‘pre-notice’ and we will carefully review and submit our response. Once the final written decision is shared with us we will carefully review to evaluate the next course of action
Google’s statement to Reuters
We disagree with the conclusions made by the KCC in their Examiner’s Report, and believe the changes we have implemented to the App Store comply with the Telecommunications Business Act. As we have always done, we will continue to engage with the KCC to share our views.
Apple’s statement to Reuters
At the moment, it remains to be seen when the KCC will actually sign the suggested penalties into effect if Apple’s and Google’s justifications for their practices are deemed inadequate. It is also unclear how the regulator calculated its proposed fines.
The KCC is allowed to fine Apple and Google under Korea’s Telecommunication Business Act which was signed into law in 2021. The Act sought to ban the ability of app store providers to restrict the choice of payment methods for developers, allowing them to seek alternatives as they see fit.
Apple infamously requires all iOS developers to rely on its in-house App Store payment solution, collecting a 15-30% commission in the process. The KCC deems this practice as a “discriminatory charging of fees to domestic app developers” in violation of the Telecommunication Business Act.
