South Korea is set to launch an investigation into both Apple and Google over claims the app store giants may be breaking its new in-app payments laws.
If found guilty Apple could be fined up to 2% of the average annual revenue from its App Store, under new laws in the country that mean companies like Apple must let developers offer alternative payments on devices like the iPhone.
As reported by Reuters (opens in new tab), “The Korea Communications Commissions (KCC) said in a statement it had conducted an inspection since May 17 to determine whether Google, Apple, and One Store had violated the rules and had determined that all three might have done so.”
Hot water
The laws and dispute concern the same pain points raised by Epic Games in Apple’s major App Store legal battle last year. Apple believes it has a right to enforce its in-app payment system on developers, taking a chunk of each transaction made on iPhone and iPad as commission for creating the ecosystem.
Some developers and countries legislating against this business model, including both South Korea and the Netherlands, believe that developers and consumers should be able to choose between systems like Apple’s in-app payment systems and other third-party alternative payment options.
This has been positioned by some, such as Epic Games CEO Tim Sweeney, as a way to circumvent Apple’s App Store fees of up to 30%. In reality, the company is charging 27% on alternative payments, retaining its right to collect commission on all transactions made by its platforms. The court that ruled against Epic Games last year also forced it to pay some $6 million to Apple in “lost” commission that wasn’t paid when Epic Games broke the App Store’s rules.
The KCC did not specify how Apple might have broken its new laws, but the report notes that possible infringements include “app market operators unfairly delaying the review of mobile content, or refusing, delaying, restricting, deleting, or blocking the registration, renewal, or inspection of mobile content that uses third-party payment methods.”
