Apple Risks South Korean Clash After Investigation Warning

Apple and South Korea could be on a collision course, after a government official reportedly warned on a possible investigation into Apple’s compliance with a new law.

In August South Korea became the first major world economy to effectively stop Apple and Google from charging commissions on in-app purchases.

It happened after South Korea’s parliament amended its ‘Telecommunications Business Act’ in order to stop Google and Apple from forcibly charging software developers up to a 30 percent commissions on in-app purchases.

Possible investigation

The ‘Telecommunications Business Act’ went into force last month, after it was approved in a vote in South Korea’s parliament in late August, with 180 voting in favour out 188 attending.

Now Reuters is reporting that a South Korean government official is warning of a possible investigation into the iPhone maker’s compliance.

Apple reportedly already told the South Korean government that it was already complying and did not need to change its app store policy, a Korea Communications Commission (KCC) official in charge of the matter told Reuters.

“This goes against the purpose of the amended law,” the official said, requesting anonymity as the KCC was still in talks with Apple on compliance.

The regulator would ask Apple’s South Korean unit for a new company policy giving greater autonomy in payment methods.

If Apple fails to comply, the regulator would consider measures such as a fact-finding probe as a precursor to possible fines or other penalties, it is being reported.

Apple did not immediately reply to a request for comment.

Google meanwhile has reportedly told the KCC that it planned to comply with the law, including allowing third-party payment systems, and would discuss the matter with the regulator starting next week, the KCC official said.

Developer impact

This law is expected to have a big impact on the developer community, who have long complained about the up to 30 percent tariff Apple and Google impose.

This is evidenced by the ongoing legal action between Apple and Epic Games, the developer of the game Fornite.

And it is worth noting that Apple and Google’s worldwide domination of in-app purchases is facing challenges outside of South Korea as well.

In March this year, the UK’s Competition and Markets Authority (CMA) launched an investigation into Apple following complaints that its terms and conditions for app developers are unfair and anti-competitive.

It comes after the European Commission in June 2020 also opened two formal antitrust investigations into Apple, over its App Store and Apple Pay.

On the other side of the pond, a bipartisan trio of US senators proposed a bill meant to ease the tight control they believe Apple and Google exert on the app market.

That is at the federal level, but some US states are pursuing their own clampdowns.