Antitrust Regulators raid Apple's South Korean offices due to alleged unfair App Store commission rate

As developers raise complaints due to over 30 percent App Store commission rate, Apple's Korean office was raided by antitrust regulators. Read on!

Apple got raided in South Korea!

Apple's South Korean office was raided by antitrust regulators

This is due to allegations of Apple getting around 33 percent commission

The raid was done by the Korea Fair Trade Commission highlighting the ongoing investigation in the country against Apple's alleged market power abuse. Mobile game creators apparently complained that Apple charges more than the standard 30 percent commission rate for purchases made in the App Store, which is what provoked the raid.

According to reports, Value Added Tax is included in Apple's 30 percent commission fee, which is 10 percent greater than Google's 30 percent commission fee, which is based on pricing that excludes VAT. Thus, rather than the advertised percent rate, Apple is actually taking 33 percent (30 percent of 110 percent).

Because Apple charges a commission on the gross price, which includes VAT, developers in Korea are charged 16.5 percent instead of the 15 percent rate that is applied to small firms or subscriptions in the first year. In the years between 2015 and 2020, the extra 3 percent reportedly amounted to about KRW 345 billion (around PHP 14 billion).

Two Korean government authorities are now looking into Apple as a result of the development. The Korea Communications Commission stated in August that it had investigated Apple, Google, and One Store since May 17 to see if they had broken any in-app payment regulations and had come to the conclusion that all three businesses may have. The KCC could issue corrective orders and impose fines as high as 2 percent of the typical annual revenue from pertinent business operations if the new investigation reveals misconduct.

Apple declared in January that it will abide by a new regulation in South Korea that forbids owners of app stores from pushing developers to use their own in-app purchase platforms. The modification took effect in late June, opening the door for developers to provide other payment methods in South Korea.

Foss Patents believe that by making using alternative payment methods unaffordable, Apple is acting dishonestly. Because Apple takes a 26 percent fee on payments handled by other companies, utilizing a third-party payment processor in Korea would cost developers about twice as much as using Apple's in-app purchases.

What do you guys think?

Source: MacRumors