South Korea threatens to fine Apple for dominance in App Store

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A South Korean regulator has told Apple and Google that they could face fines for forcing App Store developers to use their payment systems.

In 2021, the South Korean government voted to require Apple and Google to allow the use of alternative payment systems. According to Reuters, the Korea Communications Commission (KCC) has issued a notice to each company saying they are abusing their dominant position in the app market.

Specifically, KCC said in the examiner's report that the two companies continue to force app developers to use certain payment systems and also cause unfair delays in app review. According to a KCC statement seen by Reuters, the regulator advised Apple and Google to take corrective measures and is also considering fining them.

“What KCC shared today is preliminary notice” and we will carefully review and submit our response. Once the final written decision is provided to us, we will carefully review to evaluate the next course of action, Google said in a statement to Reuters.

“We disagree with the conclusions reached by KCC in the expert report and believe that the changes we have made to the App Store comply with the Telecommunications Business Act,” Apple said in a statement. “As we have always done, we will continue to work with KCC to share our views.”

“What KCC shared today is preliminary notice, and we will carefully review and submit our response,” Google said in a separate statement. “Once we are provided with a final written decision, we will review it carefully and evaluate next steps.”

It is unclear whether there is any specific deadline for the two companies to respond to the KCC. However, if the regulator decides that either response is inadequate, it will fine both companies.

Apple's fine could be up to 20.5 billion won ($15 million). Google's total could be up to 47.5 billion won ($35 million). The regulator did not specify how it calculated these fines.

Countries are increasingly imposing fines on large technology companies, and these fines are growing. In 2011, South Korea fined Apple for allegedly illegally tracking users, but the fine was less than $3,000.

But ten years later, in 2021, South Korea fined Google $177 million for abusing its dominant position in the smartphone industry.

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