South Korean antitrust regulators have raided Apple’s headquarters in the country over complaints by developers that the company is charging them more than the standard 30% cut of the action in the App Store.
The raid, which took place at dawn by the Korea Fair Trade Commission was reported by local media on Monday and covered on Friday by the Foss Patents blog.
The raid was reportedly sparked by complaints from Korean developers that Apple charges 30% of the price paid by end users, which includes value added tax (VAT), making it 10% higher than the amount on which Google bases its 30% commission, which doesn’t include VAT. That means that Apple is collecting a 33% commission, not the standard 30%.
The bloated commission also applies to the rate on subscriptions for the first year, which sees Korean developers get hit with a 16.5% commission on subscriptions because Apple collects the commission on the gross price which is inclusive of VAT.
Apple’s additional 3% reportedly amounted to approximately 345 billion won ($240 million) during the period from 2015 to 2020.
It’s a similar story in other countries where Apple operates including France and Italy (32.1%), Turkey 35.25%, and the UK (31.5%) when tax is taken into account, although developers haven’t as yet lodged a formal complaint about the practice in any of those countries.
As pointed out by Foss Patents, Apple is now facing investigations by two Korean government agencies. In August, the Korea Communications Commission launched a “fact-finding investigation” into Google Play, Apple’s App Store, and a local app store (ONE) that was apparently triggered by Google’s rejection of updates to the KaTalk messaging app.