South Korean antitrust regulators raided the Apple Korea Headquarters after app developers complained the company collects more than the 30% App Store commission rate from them. The Korea Fair Trade Commission is currently investigating Apple South Korea about the issue.
Antitrust Regulators Raid Apple Korea Headquarters
FossPatents reported that the Korea Fair Trade Commission raided Apple’s Korean Headquarters in Gangnam-gu on Monday. Local newspapers covered the dawn raid on Apple Korea Headquarters and FossPatents reported the news Friday.
The raid happened after app developers raised complaints that Apple charges more than the 30% App Store commission rate. Developers pay Apple 30% of the revenues they get from their apps through the App Store. The developers claimed Apple collects 33% commission from developers’ revenue. This is because Apple charges 30% of the price paid by end users, inclusive of value-added tax (VAT). According to FossPatents, that is 10% higher than the ex-VAT amount on which Google based its 30% commission. So Apple collected 33% (30% of 110%) commission and not the publicized 30% rate.
Additionally, the report pointed out the same mechanism applies to the 15% rate collected from small businesses or subscriptions in the first year. In reality, Apple collects a 16.5% commission on the gross price including VAT. Apparently, the additional 3% amounted to around 345 billion won ($240 million) from 2015 to 2020.
Same Scenario in Other Countries But No Complaints Yet
The situation is similar in the App Store in other countries, such as France and Italy. Apple collects 32.1% commission from the App Store in both countries. In the U.K., Apple collects 31% commission, and 35.25% in Turkey. Luckily for Apple, no developers from those countries mentioned have filed complaints.
That being said, Apple is now being investigated by two Korean authorities. In August, the Korea Communications Commission conducted an investigation into Google Play, Apple’s App Store and ONE, a local app store in South Korea. Google’s rejection of updates to the KaTalk messaging app triggered the investigation. The KCC is investigating whether Apple, Google and ONE complied with the recent amendment to Korea’s Telecommunication Business Act. The amendment required app stores to allow third-party in-app payment services.