South Korea Regulator Rules Google, Apple Breached App Store Law
Seoul’s media regulator, the Korea Media Communications Commission, concluded Google and Apple violated local laws. The ruling concerns their dominance in app marketplaces and bypassing a 2021 act. Sanctions are pending.
The Ruling
South Korea's Korea Media Communications Commission (KCC) concluded on Wednesday that Google LLC and Apple Inc. breached local laws. The regulator found both US technology firms abused their dominant positions within their respective app marketplaces. This ruling follows ongoing scrutiny regarding their payment policies and platform control.
KCC Chairperson Kim Jong-cheol presided over the meeting where this decision was finalised. The commission stated it would determine the level of sanctions at a later meeting, indicating further action.
The Violation
The companies allegedly bypassed a 2021 revision to the Telecommunications Business Act. This legislation specifically prevents major app market operators from forcing developers to use only their proprietary in-app payment systems. Following the act's passage, Google and Apple did permit third-party payment gateways.
However, they subsequently imposed a transaction fee of around 26 percent on these non-proprietary purchases. Critics argued this substantial fee effectively nullified the law’s original intent, maintaining their market dominance.
Prior Warnings and Enforcement
The KCC had previously issued a strong warning to both tech giants in October 2023. At that time, the regulator stated its intention to impose the highest possible fine on the companies for similar infringements. Despite this clear warning, no such punishment has been publicly implemented to date.
This week's definitive conclusion, however, renews the pressure for concrete enforcement action against the firms. The KCC's consistent stance demonstrates a firm regulatory approach.
This ruling demonstrates growing regulatory assertiveness across Asia regarding global technology platforms. Companies operating in South Korea, and potentially other Asian markets, face increasing scrutiny over their business practices and market control.
Google and Apple may incur significant financial penalties, alongside operational adjustments to comply with local regulations. This could influence their revenue models and cost structures in key Asian economies. Other regional regulators may observe South Korea's enforcement actions as a precedent for their own markets.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
Comments.
Comments are moderated. We remove what is unlawful, abusive or off-topic, and and you remain responsible for what you post.
Reader comments open soon. Until then, corrections and responses go to our newsroom, and we publish what we get wrong on Corrections.