Apple's Korea Offices Raided by Antitrust Regulators Over Allegations It Charges Developers 33% Commission

Apple's South Korean headquarters have been raided by antitrust regulators after a complaint was raised by developers that it is charging them over the standard 30% App Store commission rate. From a report: The dawn raid by the Korea Fair Trade Commission (KFTC) was reported by local media on Monday and covered on Friday by the Foss Patents blog, highlighting the ongoing investigation in the country into Apple's alleged abuse of market power. The complaint that sparked the raid was reportedly brought by mobile game developers who argued that Apple charges more than the typical 30% commission rate for purchases made in the App Store. As Foss Patents points out, 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. Apple is therefore collecting 33% (30% of 110%), not the headline 30% rate.

If true, oops.

[Fly Swatter]

Can't be charging a commission on government taxes, that money isn't yours.

Re:If true, oops.

[MeNeXT]

Tell that to the credit card companies they've been doing it for years.

Re:

[Fly Swatter]

According to the summary, Apple is doing this:

$10 + $1(10% VAT on $10) = $11(Charge to Customer)
Then Apple calculates their commission:
$11(Charge to Customer) * 30% = $3.30(commission))
^^This should not include VAT but Apple does. Developer sees:
$11 - $1(VAT) - $3.30(commission) = $6.70 to developer (Apple has cheated dev by $0.30)

I can't follow the logic

[MeNeXT]

To me it doesn't matter what someone charges me. The thing that I have a problem with is that products are locked from the owners that bought them. Either it belongs to Apple or it belongs to me. This concept of a sale that doesn't transfer ownership needs to end. Soon the homes we purchase will still belong to the developer or the architect.

If I choose to have someone collect my taxes for me, I understand that a fee will apply. The whole point here is that I have a choice. I can choose not to accept credit

Re:I can't follow the logic

[Fly Swatter]

> Either it belongs to Apple or it belongs to me.

Actually the app belongs to the developer and Apple charges for their service to host and distribute the developer's app to the end user along with the License from the developer to use the app.

Credit cards are charging commission on money they lend to you. You are using that lent money to pay the bill, which happens to include taxes.

A 'sale' is whatever the two parties involved, seller and buyer, agree for it to be. If there is tax on the sale - the government wants it.

Re:

[Kitkoan]

They are talking about Apple devices, not a random app on the app store.

When you buy an iPhone, Apple still controls it and can tell you what you can and cannot install on it. So, it in effect it still belongs to Apple as you need Apples "permission" to install apps you want on it.

So would this be false advertising?

[Kitkoan]

Since they aren't technically charging 30% of the sale of the app, but more (as they are collecting 30% of the sale and 30% of the tax collected), wouldn't this fall under some form of false advertising of their fees?

Or depending on how the EULA is written, possibly violation their own EULA/contract with not charging what is agreed upon? If so, this could turn into quite the interesting event.

VAT is not sales tax.

[ngufra]

The issue is about apple getting a cut of the VAT. Value Added Tax is not a sale tax. It is added by each intermediary for the value they add: Apple is getting something at X dollars and selling it at X+Y+ VAT. They are collecting all the VAT on behalf of the government, and giving it back to the government. Before they do that, they deduct the VAT they paid when they paid it X. (Vendor sold it to them for X but also had to pay the government for the VAT on the value they produced. Consumer price is usuall

Only Microsoft can break the law.

[John Smith 2294]

The law does not apply to apple. Apple is immaculate and above all laws. Because Apple. See: 1995 DoJ antitrust suit over bundled IE. Apple has been doing the same (but worse) for the last 25 years and no one bats an eye.

One bad Apple

[Tablizer]

...spoiled it for everybody.