App developers think Apple overcharged them on commissions

An Apple store in Maryland, on Aug. 25 [EPA/YONHAP]

The Korea Mobile Game Association (KMGA) asked the Fair Trade Commission (FTC) last month to look into whether Apple is overcharging local app developers for in-app purchase commissions.

According to the association’s chairman Hwang Sung-ick, Apple overcharged local app developers 345 billion won ($254 million) between 2015 and 2020 by taking more than a 30-percent commission.

“The in-app purchase commission rate on Apple’s App Store is set at 30 percent, but we have confirmed that Apple has taken 33 percent as commission,” Hwang said in an interview with a local newspaper.

App developers charge users an in-app purchase price plus 10 percent value-added tax (VAT). Apple has been collecting its 30 percent commission from the gross amount including VAT, according to Hwang, when it should not include the VAT.

Apple ended up taking 33 percent of revenue and not 30 percent, Hwang said. The 345-billion-won estimate was based on 11.6 trillion won of total payment made to Apple’s App Store between 2015 and 2020.

It may be difficult for KMGA to make its case with the FTC, as Apple does not clearly state whether the 30-percent commission includes VAT or not.

“Apple has made the terms of use very difficult for legal laymen to understand, so it’s hard to clearly state what amount it will deem as ‘revenue’ to base its 30-percent calculation on,” said an attorney who wished to remain anonymous. “But Google calculates 30 percent minus the VAT, so this may be used against Apple.”

The Korea JoongAng Daily asked Apple for a comment, but did not receive an answer.

BY YOON SO-YEON [yoon.soyeon@joongang.co.kr]