Dawn raid at Apple's Korean headquarters

Apple may have made a mistake in its favor by including Korea's VAT in their 30% developers cut.

From William Gallagher's "Apple Korea offices raided by antitrust officials" posted Friday on AppleInsider: 

Officials from Korea's Fair Trade Commission conducted a dawn raid on Apple's offices in Gangnam-gu, Seoul, over allegations that its App Store has been collecting 33% in-app payment fees, rather than its stated 30%.

 Apple has previously settled a South Korea antitrust case, which had been about the company allegedly abusing its size to drive out local competition. Now, however, the Korean FTC is responding to allegations about fees from the Korea Mobile Games Association (KMGA).

According to ChosunBiz, a local publication, the KMGA claimed to the FTC that there is an issue regard tax and tax collection. A consumer who buys an app is paying 10% value added tax (VAT) under South Korean laws, and app developers should be paying Apple 30% of the fee excluding that tax.

However, KMGA claims that Apple is instead charging its 30% fee on the total consumer spend, including VAT. This equates to Apple effectively charging developers 33%.

My take: Dawn raids have a long history.

One Comment

  1. Michael Goldfeder said:
    Typical media splash raid for maximum publicity with no viable threat. A paperwork taxation matter generates a zero dark 30 raid? Leave that for the Mob and street gangs who have heavy armament. Not a paperwork facility. What a clown show.

    September 30, 2022

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