South Korea’s Regulatory Concerns
South Korea May Fine Google and Apple Over App Practices accusing them of misusing their dominant positions in the app market. The Korea Communications Commission (KCC) has raised concerns about unethical payment methods and unfair delays in app reviews, potentially violating the country’s Telecommunications Business Act.
Enforcement of the Act
In 2021, South Korea amended its Telecommunications Business Act, specifically prohibiting app store operators from compelling software developers to use their payment systems. The KCC believes that Google and Apple’s actions, including enforcing specific payment methods and imposing discriminatory fees on domestic app developers, undermine the spirit of this law aimed at fostering fair competition.
Possible Fines and Responses
The KCC is notifying Google and Apple about the need for corrective actions and is considering imposing fines of up to $50.5 million in total. Google could face a penalty of $35.3 million, while Apple could be fined $15.2 million. Both companies have responded by stating that they will carefully review the KCC’s concerns and await the final decision. Apple also expressed its disagreement with the KCC’s conclusions.
Global Scrutiny of Tech Giants
This investigation in South Korea is not an isolated case. Google is currently facing antitrust trials in the United States related to alleged monopolization of the search engine market. However, large fines have often proven to be insufficient incentives for big tech companies to amend their behavior.
A Long-Running Investigation
The KCC initiated its investigation into Google and Apple on August 16, 2022, and has now released its findings, suggesting that both companies violated in-app payment regulations. These violations include forcing app developers to use their in-app payment methods and charging extra fees to Korean app developers, which breaches the Telecommunications Business Act.
Enforcing Fair Market Practices
The KCC’s actions aim to create a healthy app market and protect user choice. It reiterates that it has the authority to enforce these regulations on both domestic and foreign tech companies operating in Korea. The regulator plans to deliberate on the fines in light of the responses from Google and Apple.
Investigating App Store Practices
The KCC’s investigation extends beyond Google and Apple. It also includes SK Group’s ONE Store, which is a homegrown app store. The regulator began its inquiry on May 17 and believes that all three app stores may have violated the country’s telecommunications act, which allows developers to use third-party payment options and prohibits app store operators from mandating their own systems.
The international landscape is increasingly scrutinizing the practices of tech giants like Google and Apple. The European Union recently adopted the Digital Markets Act (DMA) to ensure fair market practices, potentially impacting app stores’ payment methods. U.S. lawmakers are also considering rules to address app distribution monopolies on mobile devices.
Cooperation and Next Steps
Google has stated its willingness to cooperate with the KCC’s investigation, emphasizing its commitment to expanding user choice while complying with new laws. The final decision on fines will be made by the KCC after considering the responses from both Google and Apple.
South Korea’s investigation into Google and Apple underscores the growing global concern over the behavior of tech giants in the app market. With potential fines on the horizon and increased regulatory scrutiny, these companies face challenges in maintaining their dominant positions while adhering to evolving regulations aimed at ensuring fair competition and user choice.
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