South Korean regulator worried Apple, Google, may be working around app store payment choice law

Feels some actions may amount to coercion to stick with giants' own payment schemes

South Korea's Communications Commission (KCC) said on Tuesday it is investigating Google, Apple and domestic app store operator One Store Co. over sneaky ways the companies may be dodging the country's in-app payment laws.

The regulator's announcement of the probe follows provisional inspections of all three stores since May 17 regarding violations of the Telecomunications Business Act [PDF] – a law that promotes public interest in telecom-related matters.

Among many things, the Act prevents tech giants with dominant market positions making their own payment method the only one available on an app store. South Korea was the first nation to mandate app store payment choice with an August 2021 amendment designed to target the likes of Google and Apple.

Google agreed to comply in early October 2021, while Apple dragged its feet, claiming it already did comply, until persistence from the KCC and fines of up to two percent of subsequent revenue convinced it otherwise in January this year.

South Korea remains the only country to have such a law. Outside of the Southeast Asian country, developers hand over up to 30 percent of their revenue from app and in-app purchases made through the official stores.

But KCC fears that while Apple and Google appear to be complying with the law, they are finding ways to coerce developers into using their native payment systems – or punishing those that don't.

"If Google and Apple impose discriminatory conditions on the payment method (third-party payment) provided by the app developer or makes the use procedure inconvenient, it may constitute an act of forcing a specific payment method," KCC's announcement states (after machine translation).

The watchdog org added that it understood there are problems in the giants' app review processes, such as Apple not notifying developers of review periods or reasons for delays.

KCC said it plans to clarify whether such an act constitutes indirectly "forcing" a specific payment method. If the regulator finds companies in violation of laws, there will be "strict measures such as correction order or fines."

The addition of One Store to the group of companies receiving KCC scrutiny is notable, as the company belongs to SK Group – the second largest South Korean conglomerate after Samsung. In April, One Store announced that it would expand globally into both Asian and European markets. ®