2 Korean publishing associations sue Google, Apple over mandatory in-app purchases

Lawyer Lee Byung-joo, fourth from left, who represents the Korean Publishers Association (KPA) and the Korea Electronic Publishing Association (KEPA) in class-action lawsuits against Google and Apple in the U.S., speaks during a press conference in Seoul, Tuesday. Second from left is KEPA CEO Kim Hwan-cheol and third from left is KPA President Yoon Chul-ho. Courtesy of Korean Publishers Association

Korea's two publisher associations have filed class-action lawsuits in the United States against two tech giants, Google and Apple, accusing them of enforcing monopolistic in-app purchasing policies and imposing a mandatory commission of up to 30 percent.

Currently, users of both Android and Apple devices in Korea must use the tech companies’ in-app payment systems when purchasing e-books or subscribing to book-related applications, and the app developers must pay up to 30 percent commission for each transaction.

The Korean Publishers Association (KPA) and the Korea Electronic Publishing Association (KEPA) — whose members include Kyobo Book Centre, Korean online bookstore Yes24 and various webtoon apps — say they are representing the interests of the broader publishing and content industry in these suits.

“These companies have long been victims of Big Tech monopolies but were too afraid to take action alone due to fear of retaliation,” Kim Hwan-cheol, chairperson of KEPA and founder of the online novel platform Munpia, said during a press conference in central Seoul, Tuesday.

KPA President Yoon Chul-ho emphasized that a victory in this case could have ripple effects beyond publishing.

“If we win, mobile app developers in other sectors such as gaming and music, which are often considered the biggest victims of the in-app purchasing rule, could also benefit,” Yoon said.

“The mandatory in-app purchasing policy has destroyed the content economy ecosystem across all cultural sectors ... A win would help not only app developers but also content creators.”

KPA also noted that the compulsory payment structure has significantly hurt both creators and consumers.

“Content creators have seen their profits drop by around 40 percent, while consumers are paying far more,” he said, estimating the losses in the print industry at up to 80 billion won ($58 million) per year.

According to the plaintiffs, the lawsuits were filed in the U.S. District Court for the Northern District of California — against Apple on May 27, and against Google on June 2 (local time). The associations are being represented jointly by Korean firm Jihyang Law and U.S.-based Hausfeld LLP.

In two separate lawsuits, the plaintiffs are seeking recognition of what they allege are illegal monopolistic practices and are demanding compensation from the tech giants.

Lee Byung-joo, a U.S.-based lawyer representing the plaintiffs, expressed optimism about the case.

“A similar case brought by U.S. app developers resulted in a win for the plaintiffs,” he said. “Given that precedent, we believe our chances are quite strong.”

He declined to speculate on the amount of compensation or settlement, saying that it will be determined later.

In September 2021, a judge in the Northern District of California ruled that Apple had violated California’s Unfair Competition Law by restricting third-party payment methods and ordered the company to permit external payment links in applications.

The lawyer also noted that the lawsuits represent the first legal action of this kind from an Asian country.

“Countries like Australia, the Netherlands and others in the EU see similar cases filed against the two companies. But no Asian country had taken this kind of legal step — until now,” he said.

Korea is also one of the earliest countries to respond legislatively to such practices. In March 2022, a law came into effect prohibiting platform operators like Apple and Google from abusing their dominant market position by forcing content providers to use a specific payment method.

Yet, the two companies have not changed their practicies.

In October 2023, the Korea Communications Commission (KCC) fined the two companies 68 billion won ($50 million), though the penalties were not successfully enforced.

Regarding the issue, Apple's public relations representative in Korea told The Korea Times in a message, "Apple charges developers a commission if they choose to monetize their apps through the sale of paid apps and digital goods and services sold in-app. Eighty-five percent of apps on the App Store do not pay any commission to Apple whatsoever. Apple has reduced our commission rate for a vast number of developers through a variety of programs over the course of the last few years."

However, an official from one of the publishers' associations said negotiating the commission rate is not easy, especially among small companies.

“Let’s imagine you’re an independent app developer — you still have to pay a 30-percent commission. But large app companies can negotiate lower rates,” the official said on condition of anonymity.