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South Korea threatens to fine Apple over App Store dominance

William Gallagher |

Flag of South Korea

Both Apple and Google have been told by a South Korean regulator that they may face fines for forcing App Store developers to use their payment systems.

In 2021, the South Korean government voted to require Apple and Google to allow alternative payment systems. According to Reuters, the Korea Communications Commission (KCC) has now issued a notice to each company, saying that they are abusing their dominant position in the app market.

Specifically, the KCC said in an Examiner's Report that two were still forcing app developers into specific payment systems, and also causing unfair delays in app review. According to a KCC statement seen by Reuters, the regulator has told Apple and Google to take action to correct this, while it considers whether to fine them.

"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 said in a 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," said Apple in a statement. "As we have always done, we will continue to engage with the KCC to share our views."

"What KCC has shared today is the pre-notice' and we will carefully review and submit our response," said Google in a separate statement. "Once the final written decision is shared with us we will carefully review to evaluate the next course of action."

It's not clear that any specific deadline has been set for the two companies to respond to the KCC. However, should the regulator decide that any response is inadequate, it will fine the two companies.

Apple's fine could be up to 20.5 billion won ($15 million). Google's could be up to 47.5 billion won ($35 million). The regulator has not detailed how it has calculated these fines.

It's becoming more common for countries to impose fines on Big Tech firms, and those fines are increasing. In 2011, South Korea fined Apple for alleged illegal tracking of users, but the fine was under $3,000.

But then ten years later in 2021, South Korea fined Google $177 million for reportedly abusing its smartphone dominance.