Apple fined $15.5 million in South Korea: what changes for App Store payments

South Korea's Korea Media and Communications Commission announced fines and corrective orders against Apple and Google over app payment practices. For Apple, the regulator imposed a fine of 20.81 billion won, roughly $15.5 million. The KMCC also ordered Apple to revise its App Store policies on payment methods and app review procedures.

It further required the company to prevent what it called "discriminatory commission" practices from happening again. The announcement states this is the first enforcement case under the 2021 amendment to the Telecommunications Business Act. That amendment introduced prohibited acts for app market operators, including forcing specific payment methods and unfairly delaying app reviews.

On payments, the KMCC said Apple and Google "effectively forced" developers to use their own in-app payment systems. The regulator cited a 26% commission and additional restrictions on third-party alternatives. It described this as an app market operator unfairly using its position to push mobile content providers toward a specific payment method.

As a result, Apple and Google must revise their policies to allow external payment methods. They must also address the restrictions placed on developers who use alternative payment systems. The KMCC framed the decision around three violations: forcing specific payment methods, unfairly delaying app reviews, and imposing discriminatory commissions.

The KMCC also found problems in the app review process. It said Apple and Google delayed app reviews, for example by not giving specific reasons when reviews were delayed. The regulator added that the companies did not clearly respond to individual inquiries about the reasons for delays and expected timelines. Apple and Google must therefore revise their app review procedures to address these issues. The corrective orders cover both payment methods and review procedures, according to the announcement.

The discriminatory commission finding applied only to Apple. The KMCC found that between July 2015 and January 2023, Apple calculated its 30% commission differently for South Korean and overseas developers. Overseas developers were charged on prices excluding value-added tax (VAT). South Korean developers were charged on prices including VAT. The KMCC determined this constituted unfairly providing rates or other economic benefits in a discriminatory manner compared with other users. Apple will also have to take measures to prevent such practices between South Korean and overseas developers from recurring.

According to Reuters, Apple said it "disagreed with the decision" and was evaluating options in accordance with South Korean laws. Apple added that it has worked with outside developers to enable innovation through its App Store. The decision follows similar regulatory pressure in other markets. In Brazil and Japan, Apple has introduced alternative app distribution and payment options in response to local competition rules. In the European Union, the company recently overhauled its App Store fees and business terms to address concerns raised by the European Commission. What remains to be seen is how Apple revises its South Korean policies and whether it challenges the order.