South Korea fines Google and Apple 63.7 billion won over in-app payment steering

South Korea has spent much of the past decade positioning itself as the world's most aggressive testing ground for the rules that govern mobile app stores. In 2021 the country amended its Telecommunications Business Act to stop app store operators from forcing developers onto a single in-app payment system, the first law of its kind to take effect anywhere. The target was unmistakable: Google and Apple, the two companies whose storefronts mediate almost every app installed on Korean smartphones.

The statute was celebrated as a template for regulators elsewhere, a way to break the link between distribution and billing that lets platform owners take a cut of nearly every digital transaction on a phone. What followed was a long argument about whether it had changed anything. On paper, both companies let developers offer third-party payment systems inside their apps. In practice, the commission that enforces the statute concluded, the alternative was engineered to be unattractive.

That argument reached a conclusion on Wednesday, when the Korea Media and Communications Commission issued its first financial penalties under the 2021 framework: a combined 63.7 billion won in fines and a set of corrective orders against the two American companies. The investigation behind the decision had been running since August 2022, and the companies were first formally notified of the alleged violations in October 2023.

The decision lands in a crowded field. European authorities have been pursuing the same two companies under the Digital Markets Act, which similarly forbids gatekeepers from blocking developers who want to point users toward cheaper options. Korea's action is therefore the first completed test of whether anti-steering rules can survive contact with the way app stores are actually designed.

Key Facts

Yonhap News Agency reported on October 28 that the Korea Media and Communications Commission approved fines of 42.9 billion won for Google and 20.81 billion won for Apple, a combined 63.7 billion won, describing the total as roughly 45 million dollars. The regulator said both companies violated the Telecommunications Business Act through their app store payment policies and had abused their dominant positions by forcing developers to use specific payment methods while imposing unfavorable conditions on the alternatives.

Reuters reported on October 28 that the commission fined Google 42.9 billion won, which it converted to 32.35 million dollars, and Apple 20.8 billion won, citing an exchange rate of 1,326.0900 won to the dollar. The Associated Press put the combined figure at 47.6 million dollars, with Google's share at 32 million dollars and Apple's at 15.5 million dollars, while Euronews reported the same total as 42.7 million euros. The differing dollar and euro conversions reflect the exchange rates each outlet applied on the day.

The commission found that the companies blocked payments through external websites entirely and, although they technically permitted third-party payment systems inside apps, charged developers a 26 percent commission on those transactions. That is only marginally below the 30 percent they charge for their own systems, and they also withheld features available through their in-house payment flows. The conclusion was that developers had little real choice, the outcome the 2021 law was written to prevent.

The Associated Press reported on October 28 that the commission also found instances in which the companies delayed app reviews without clearly explaining the reasons to developers or saying when a review would resume. It further accused Apple of charging South Korean developers higher commissions than developers elsewhere between 2015 and January 2023, because it calculated its commission on prices that included value-added tax.

Alongside the fines, the KMCC issued corrective orders. Both companies must allow developers to offer alternative payment methods, including external payment links inside apps, and must adjust fees for third-party payment systems to reasonable levels. Google was ordered to revise its user experience guidelines for third-party payments, and Apple was told to scrap its requirement that developers submit separate apps when offering alternative payment options. The companies have one month from receipt of the orders to submit compliance plans and three months to implement the changes. The commission said it would not file criminal complaints against either company.

Analysis

The design of the remedy is more interesting than the size of the penalty. Korea's 2021 law never banned the 30 percent commission; it banned the requirement to use a particular payment pipe. Google and Apple responded by opening the pipe and pricing the alternative at 26 percent, which preserved almost all of the economics of the closed system while satisfying the letter of the statute. The commission has now effectively ruled that a discount of four percentage points, unaccompanied by feature parity, is not a genuine choice. That is a significant interpretive move, because it converts a rule about plumbing into a rule about pricing power.

What this really means is that the compliance strategy the platforms have used since 2021, offer the option but make it expensive and second class, has been closed off in the one market where it was first attempted. The corrective orders aim at the second-class part of that strategy as much as the price: Apple must stop requiring a separate app binary for alternative payments, and Google must rewrite the guidelines that determine how third-party checkout is presented to users. If those changes are implemented as written, the practical gap between paying inside the store and paying outside it should narrow, and developers will be able to test whether Korean users actually migrate.

Euronews reported on October 28 that the investigation began in August 2022 and that the case echoes the European Union's Digital Markets Act, under which Apple was fined in April 2025. The comparison is instructive but imperfect. Brussels regulates gatekeepers by prospectively dictating what they may and may not do, while Seoul is applying a narrower statute retroactively to conduct it has spent four years documenting. Korea's advantage is that it has an actual finding of fact about a 26 percent commission and withheld features. Its disadvantage is that the penalty is retrospective and the market has already moved on, in part because Google announced in March that it would allow external payment options and lower service fees.

Google's response reflects that timing. Yonhap reported on October 28 that the company expressed regret and said the commission had not taken into account its recent policy changes aimed at giving developers more payment options and reducing commission fees. Apple told Reuters it disagreed with the decision and was evaluating its options in accordance with South Korean law, adding that it has worked with outside developers to enable innovation through its App Store. The compliance deadlines give the regulator a second lever if either company simply absorbs the fine and changes nothing, but the absence of criminal referrals suggests the commission is aiming at behavior rather than punishment.

Why It Matters

The immediate significance is procedural. For five years, the 2021 Korean law has been cited in policy debates from Washington to Tokyo as proof that anti-steering rules are workable, without much evidence about how they would be enforced. The KMCC has now produced that evidence: a four-year investigation, a documented theory of harm built on a 26 percent fee, two separate remedies tailored to each company's architecture, and a compliance timetable. Regulators elsewhere no longer have to argue from first principles.

The second consequence concerns the arithmetic of app store economics. A 26 percent commission on third-party payments is not a rounding error; it is the mechanism that determines whether an external checkout link is a genuine alternative or a decorative one. By rejecting it, the commission has established that the test is effective cost and user experience rather than nominal availability. That standard, if adopted by other regulators, would force a real repricing of external payments, not merely a new menu item.

The third consequence is institutional. South Korea has now shown that it will apply its competition rules to foreign platform operators through administrative fines and orders rather than through courts, which is faster but also easier to contest. Apple's statement that it is evaluating its legal options indicates where the next phase will be fought. The commission's authority to compel changes within three months is only as strong as its ability to defend those orders if they are challenged.

Next Up

The clock is now running on the corrective orders. Google and Apple must file compliance plans within one month and complete the required changes within three months, which puts implementation in the early part of 2027. The first test will be whether the plans address the fee structure or only the interface: revising guidelines and dropping a separate app requirement are visible, checkable steps, while adjusting third-party fees to a reasonable level leaves the commission substantial discretion.

Watch three signals. First, whether Google's March commitment to allow external payment options and lower service fees is presented as the compliance plan or treated as insufficient. Second, whether Apple's evaluation of its legal options turns into an administrative suit that suspends the orders. Third, whether regulators in Europe cite the Korean finding on the 26 percent commission. Whichever way those resolve, the era in which Korea's 2021 law could be described as an untested experiment is over.