"Targeted Apple Precisely"... Unprecedented Simultaneous Investigation by Prosecutors and Fair Trade Commission

Recently, the prosecution has launched an investigation into allegations that Apple excessively charged fees on its App Store. This case has been under investigation by the Fair Trade Commission since last year. It is unusual for two agencies to simultaneously scrutinize the same case involving one company, drawing attention to the background of this situation.

According to industry sources on the 18th, the prosecution recently assigned the case, in which the Korea Mobile Game Association filed a complaint against Apple for violations of the Telecommunications Business Act and the Fair Trade Act, to the Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Jeong-seop). Typically, cases under the Fair Trade Act are investigated by the Fair Trade Commission, which holds exclusive prosecution rights, and only after its own investigation and decision to file charges does the prosecution begin its investigation.

An expert in the Fair Trade Act stated, “In principle, the prosecution can initiate an investigation even without a complaint from the Fair Trade Commission, but it is unusual for the prosecution to directly investigate a Fair Trade Act case.” It is considered rare for the prosecution to review a case simultaneously with the Fair Trade Commission before the latter has concluded its investigation. The Fair Trade Commission has also been investigating this case since last year. The commission explained that even if both agencies investigate the same matter, they proceed with their respective investigations and prosecutions without significant changes.

However, regarding this unusual simultaneous investigation and prosecution, some interpret it as a warning from the government directed at the global big tech company Apple. Another Fair Trade Act expert remarked, “Apple is acting as if saying, ‘We won’t do it again,’” adding, “This attitude is seen (at the government level) as Apple being overly bold as a global big tech company only in its domestic business.” This investigation began after the Korea Mobile Game Association, which had reported Apple to the Fair Trade Commission last year, filed a complaint with the prosecution this year.

Apple has been charging developers a 33% fee in practice, contrary to its terms that state a 30% commission on in-app payments. Apple cited the clause in its terms that the commission is calculated based on the amount after deducting all taxes. The Korea Mobile Game Association estimated that Apple effectively charged an additional 3% fee only in Korea, resulting in over 350 billion KRW being overcharged from 2015 to 2020. The Mobile Game Association reported Apple to the Fair Trade Commission in August last year.

When the Fair Trade Commission began its investigation, Apple issued an official statement in December last year, announcing a voluntary correction plan to reduce the commission to 30%. Apple stated, “We will calculate the commission by excluding value-added tax from the revenue generated by Korean developers in the domestic App Store.” However, this change was to be applied only from January this year onward. In other words, no measures were proposed regarding the past overcharged fees.

In response, the Mobile Game Association recently decided to additionally file a complaint against Apple with the prosecution. A representative of the Mobile Game Association said, “Although the Fair Trade Commission has not yet reached a conclusion, we have filed a complaint with the prosecution and reported to the Korea Communications Commission,” adding, “Apple has not admitted any wrongdoing and has unilaterally issued a voluntary correction.”

This content was produced with the assistance of AI translation services.