An App Store antitrust investigation in South Korea could see Apple, Google, and local company One Store found guilty of breaching a law that came into effect earlier this year.
If confirmed, then each company could be fined up to 2% of its revenue in the country …
App Store antitrust background
Apple has come under fire in multiple countries for forcing app developers to use the company’s own payment system for App Store and in-app purchases.
In the Epic Games lawsuit in the US, it was ruled that Apple must allow developers to redirect users to other payment systems. There have been similar rulings in other countries, whether as a result of lawsuits or legislation.
South Korea passed legislation a year ago that took effect in March of this year.
Apple suspected of violating the law
Reuters reports that Apple, Google, and One Store are all suspected of violating the law.
It was last week reported that an amendment to South Korea’s Telecommunications Business Act would force both Apple and Google to permit the use of third-party payment platforms in their app stores. The vote was originally set to happen yesterday, but was delayed by a day due to other legislation over-running its scheduled time. The vote has now passed.
Apple had not responded to Reuters’ request for comment at the time of writing but has previously said that it will abide by the law, despite its opposition to the requirement.
South Korea’s telecommunications regulator said on Tuesday it plans to launch an investigation into app store operators such as Apple, Google and One Store over suspected violations of in-app payment law.
Potential fines for infractions could be as high as 2% of the average annual revenue from related business practices, the law says […]
The Korea Communications Commissions (KCC) said in a statement it had conducted an inspection since May 17 to determine whether Google, Apple and One Store had violated the rules and had determined that all three might have done so.
In both Korea and the Netherlands, Apple’s approach has been to reduce its 30% commission by only three percentage points if developers choose to use third-party payment services.
The Telecommunications Business Act will put users who purchase digital goods from other sources at risk of fraud, undermine their privacy protections, make it difficult to manage their purchases, and features like “Ask to Buy” and Parental Controls will become less effective. We believe user trust in App Store purchases will decrease as a result of this legislation — leading to fewer opportunities for the over 482,000 registered developers in Korea who have earned more than KRW8.55 trillion to date with Apple.
It’s unclear from the report whether the compliance attempts by the various app stores are judged insufficient, or whether they did not meet the March deadline.
We’ll need to wait for the conclusion of the investigation to find out whether and how Apple breached the law on third-party payments. In general, Apple does comply with all local laws, though when it comes to antitrust matters, it has typically delayed compliance as long as possible, and then taken steps to do the absolute minimum it considers necessary to technically comply. Regulators might well take a different view to Apple on the measures needed to respect the law.
Photo: Kaleidico/Unsplash
