Apple’s South Korea offices were raided by antitrust regulators on Friday over a case of shoddy math, according to multiple reports.
Antitrust investigators in the Korean Fair Trade Commission conducted an early morning raid on Apple’s Korean headquarters following complaints from mobile developers accusing the company of charging them fees above the typical 30% App Store commission on purchases, according to reports in local media picked up by MacRumors. The raid marks the most dramatic escalation yet of Apple’s lengthy battle with South Korean regulators over the fairness of its App Store policies.
The raid reportedly revolves around complaints from a group of mobile game developers over Apple’s commission rate, known by some as the “Apple Tax” for purchases made in the App Store, has reached 30% of the price paid by end users. That’s potentially significant because in South Korea, that reportedly includes an additional 10% value added tax (VAT). So, while Apple told developers they would pay a 30% fee on App Store transactions, the addition of the VAT means would mean they actually pay 33%, developers say. Smaller developers who expect to pay a 15% fee under Apple’s revised App Store Rules report paying 16.5%.
Apple did not respond to Gizmodo’s request for comment but did not refute the events in a statement sent to Apple Insider.
“Apple is fully cooperating with the KFTC during their investigation,” the company reportedly said. “We look forward to explaining how the App Store has been a tremendous business opportunity for Korean developers,” the spokesperson continued.
The KFTC did not respond to Gizmodo’s request for comment.
Apple’s tussles with Korean regulators over its App Store policies span the better part of a year. In August, the KFTC announced an investigation into Apple, Google and several other companies to determine whether or not they violated the country’s in-app payments rules. South Korea amended its Telecommunications Business Act last year with new regulations prohibiting owners of markets like Apple from forcing developers to use proprietary in-app purchasing systems. Apple complied with the law and provided a third-party payment option, though company documents still require developers to pay a 26% commission, “on the price paid by the user, gross of any value-added taxes”