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The South Korea Communications Commission (KCC) has launched a probe into Google and Apple business practices in the country. The agency worries that the American companies misuse their dominance in the app market.
As two tech giants with global dominance, Google and Apple face multiple lawsuits a year that drive them into legal battles with regulators and watchdogs. Most lawsuits argue these companies leverage their power to abuse the market and competition. This time, the South Korean telecommunications regulator is investigating Play Store and App Store payment methods.
The agency claims Google and Apple forced app Korean developers to use a specific payment method that could lead to unfair delays in app review. The two tech giants are required to take corrective action. Otherwise, they could face fines totaling up to $50.5 million.
The South Korean telecommunications regulator could impose a $50.5 million fine on Apple and Google over their app store policies
In response, Google said it has received a pre-notice, and they’ll take necessary actions once the final written decision is shared with them.
But Apple’s response to KCC was more drastic. The company stated, “We disagree with the conclusions made by the KCC in their Examiner’s Report and believe the changes we have implemented to the App Store comply with the Telecommunications Business Act. As we have always done, we will continue to engage with the KCC to share our views.”
Both Google and Apple force app developers to use a payment method provided by the company. This has led to many antitrust cases against these tech giants in the United States and European Union. The critics claim this practice undermines competition in the payment industry and gives even more dominance to app store owners.
As for South Korea, it passed an amendment to the Telecommunication Business Act in 2021 that prevents app stores from forcing developers to use a specific payment method. KCC added the law’s purpose is to promote fair competition, but enforcing a payment method to app developers deviates the bill from its purpose. The agency also described Apple’s practices as “discriminatory charging of fees to domestic app developers.”
Despite the competition, Google and Apple have many common interests, including the search market. Google pays over $20 billion a year to Apple to be the default search engine on Safari browser. This has drawn criticism from Microsoft, the owner of Bing. The Redmond company argues Google’s payment to Apple is hurting competition.