EU imposes 2.7 trillion won fine on Apple
Apple reduces EU fees by up to 13%
Korea’s 4% point cut is pointed out as ‘discrimination’
The European Union (EU) imposed a fine of 1.84 billion euros (approximately 2.7 trillion won) on Apple’s ‘in-app payment’ (payment within the App Store) practice, sparking anti-monopoly regulations on big tech. This is a record-breaking ‘fine bomb’ that more than tripled the 500 million euros originally expected in the market, and is expected to have an impact not only on the United States but also on the domestic in-app payment conflict.
EU Vice-President Margrethe Vestager said in a statement on the 4th (local time), “Apple has abused its dominant position in the music streaming app distribution market. The reason for the fine was stated, “iOS” (Apple’s mobile operating system) users had to pay much higher fees for music streaming subscriptions.
After launching the App Store along with the iPhone, Apple was criticized for charging a 30% commission or ‘toll tax’ for in-app purchases for 16 years, hindering competition between apps and giving its own apps, such as ‘Apple Music’, an advantage. there is. The EU began an investigation in 2019 following a complaint by the Swedish music streaming app company ‘Spotify’ and made this decision after intensively assessing whether Apple had disadvantaged music app competitors and harmed consumers through in-app payments.
The prevailing analysis is that the EU’s astronomical fines imposed on Apple are just the beginning of Big Tech regulations that are spreading globally. The U.S. Department of Justice also announced its intention to impose regulations on major big tech companies.
However, it is unclear whether Apple will actually pay 2.7 trillion won. Apple is fighting a lawsuit against the EU’s order to pay 13 billion euros in taxes owed to Ireland. He also announced that he would appeal the imposition of this fine.
Apple and Google are also opposing the Korea Communications Commission’s imposition of fines in October last year. Korea became the first country in the world to enact the ‘In-App Payment Compulsory Prohibition Act’ (Amended Telecommunications Business Act) in 2021 to prevent app market operators from forcing specific payment methods. Afterwards, the Korea Communications Commission decided to impose fines of 47.5 billion won and 20.5 billion won on Google and Apple, respectively.
As of now, it seems unlikely that the two companies will accept the Korea Communications Commission’s fine. This is because this decision will have a large impact on the European and American markets. However, there is interest in whether the EU’s imposition of fines will lead to a change in the attitudes of Apple and Google. An official from the Korea Communications Commission said, “Although there are some differences between the EU and Korean legal systems, the EU’s imposition of fines on Apple could serve as a reference for (the Korea Communications Commission),” adding, “We are currently carefully reviewing the opinion submitted by Apple.” He said.
The problem is that while Apple is actively introducing improvement measures in the EU, movement is relatively slow in Korea.
Apple announced that it will allow third-party payments in addition to in-app payments in June 2022, after the ‘In-app Payment Compulsory Prohibition Act’ was enacted in Korea. The commission rate was set at 26%, 4 percentage points lower than the platform’s own in-app payment (maximum 30%). This is a very low figure compared to the cut of up to 13 percentage points in Europe.
On the surface, it appears that Apple has complied with Korean law, but some in the industry point out that this is actually a ‘trick’ to encourage in-app purchases. If you choose a third-party payment method, in addition to the 26% commission, additional payment agency and card company fees are charged. In this case, it is pointed out that the actual commission exceeds 30%, which is actually a loss for the business operator who chose a third-party payment method.
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Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.