South Korea’s Korea Media and Communications Commission has fined Apple 20.81 billion won, approximately $15.5 million, for app-store practices that violated the country’s Telecommunications Business Act. The ruling is the first enforcement action under the law’s 2021 amendments, which prohibit app-market operators from forcing specific payment methods on developers and from unfairly delaying app reviews.
The fine is consequential, but the corrective orders attached to it are what will reshape Apple’s operations in South Korea.
What Apple Must Now Do
The KMCC’s orders reach into Apple’s billing rules, app-submission requirements, review procedures, and commission practices.
Apple is required to permit alternative payment methods and allow external payment links directly within apps. It must also remove or revise a requirement that developers submit entirely separate apps when offering those alternative billing options. The KMCC found that condition made third-party payment difficult in practice.
The regulator ordered Apple to revise the fees and conditions attached to third-party payment options. Even where Apple had nominally permitted alternatives, it imposed fees of up to 26%, which the KMCC said effectively made its proprietary billing system compulsory.
Apple must also fix its app-review procedures. The KMCC found that both Apple and Google failed to give developers specific reasons for review delays or clear timelines, and ordered both companies to address those shortcomings.
Finally, Apple must establish preventive measures to stop discriminatory commission practices from recurring.
The VAT Asymmetry
The regulator’s discrimination finding centers on how Apple calculated its commission differently for domestic and overseas developers over nearly eight years.
Between July 2015 and January 2023, Apple applied its standard 30% commission to prices excluding VAT when calculating fees for overseas developers. For South Korean developers, the same commission applied to consumer prices including VAT. That treatment resulted in a higher commission base for domestic developers relative to foreign counterparts selling through the same platform, according to the KMCC’s findings.
The Compliance Clock
Both companies face a firm timetable for submitting plans and completing the required changes.
Apple and Google each have one month from receipt of the corrective orders to submit compliance plans. Full implementation of the required changes must follow within three months. The KMCC said it would not file criminal complaints against either company in this case.