Google and Apple were fined a combined 63.71 billion won by the Broadcast Media and Telecommunications Commission for forcing in-app payments. The commission ordered the two companies to allow external payments and improve the fee structure for third-party payments.

The commission held its 46th plenary meeting on Oct. 28 and approved fines and corrective orders over violations of the Telecommunications Business Act by Google and Apple. It imposed a 42.9 billion won fine on Google and a 20.81 billion won fine on Apple.

The decision marks the first application of provisions introduced after a 2021 amendment to the Telecommunications Business Act banned forcing a specific payment method and unjustifiably delaying app reviews. The commission previously conducted on-site inspections and fact-finding investigations into Google and Apple starting in 2022. In October 2023, it gave advance notice of a plan to impose fines of up to 68 billion won.

The commission's investigation found Google and Apple allowed app developers to use only their own in-app payments and third-party payments, while restricting other payment methods such as external payments. While allowing third-party payments, they charged a 26 percent fee and provided services with some functions limited compared with their own in-app payments. The commission also found they applied unreasonable conditions without considering costs such as building payment systems and settling fees beyond payment gateway fees, effectively forcing the use of their own in-app payments.

The commission determined these actions violated the Telecommunications Business Act by unfairly using a superior bargaining position to force a specific payment method.

Unjustified delays in app reviews were also included in the sanctions. The two companies were found not to provide specific reasons when app reviews were delayed, or to clearly explain the reasons for delays and future schedules even when developers made inquiries.

Apple was also found to have imposed different commissions on app developers in South Korea and abroad. From July 2015 to January 2023, it applied a 30 percent commission to overseas developers based on the supply value excluding value-added tax. For domestic developers, it applied the same commission rate based on the final consumer price including value-added tax.

Along with the fines, the commission issued corrective orders requiring the two companies to improve policies that limit choice of payment methods and to improve app review procedures. The companies must allow app developers to effectively choose payment methods other than their own in-app payments and third-party payments by permitting separate payment options through external links within apps. They must also improve commission policies applied to third-party payments.

The commission ordered Google to improve user experience guidelines applied to third-party payments. It ordered Apple to improve unreasonable conditions such as requiring separate app submissions when using third-party payments. It also required the companies to provide specific reasons and future schedules when app reviews are delayed, and told Apple to prepare measures to prevent a recurrence of commission discrimination between domestic and overseas developers.

The final fines confirmed this time are 4.29 billion won lower than the maximum 68 billion won presented in the 2023 advance notice. The commission calculated the final amount based on domestic app market service revenue related to the violations, reflecting statutory aggravating and mitigating factors and the cap on fines.

The two companies must submit implementation plans within 1 month of receiving the corrective orders and complete improvements within 3 months.

Kim Jong-cheol (김종철), chair of the commission, said, "I hope this sanction can become a turning point for substantial changes in market structure that app developers and end users can feel." He added, "We will continue to closely examine user protection issues related to platform operators and create a foundation for a fair and open mobile ecosystem."