Korea to Investigate Apple and Google's In-App Purchase Practices

Last week, multiple startup companies in Korea called for an investigation into Apple and Google's in-app purchase practices. Now, The Korea Herald has confirmed that the Korean Ministry of Science and ITC will launch an investigation to look into the two companies' "excessive commissions."

The investigation will examine platform fees, payment systems, and whether Apple and Google have violated Korean laws that prohibit technology service operators from obstructing users to choose services.

Apple and Google made up 87.8 percent of the Korean app market in 2019, and the issue is effectively an antitrust investigation. The original petition submitted by an alliance of app developers and small companies argued that platform operators are using their immense market share to give developers no choice but to submit to high commission fees.

They explained that Apple has been forcing developers to use their specific in-app purchase system since 2011, through which Apple takes a 30 percent commission. Google demands game apps in Korea use its own in-app purchase module and adds an additional 30 percent game-only commission. Google reportedly plans to expand restrictions on developers, and demand a 30 percent commission on webtoons, music streaming, and e-books.

"[The ministry] will carefully monitor and prepare policies that can cope with the increasing influence of platform providers," a Ministry of Science and ITC spokesperson said. "The ministry will also mediate between developers and platform operators to secure user rights."

The ministry laid out plans to collect opinions from local app developers and smaller market sources to see if the companies' platform fees are unfairly hindering business operators and in turn raising prices for consumers.

The outcome of the investigation could be sweeping amendments to Korea's new Telecommunications Business Act, which takes effect in January.