Apple which is charged with the alleged misuse of its market power in South Korea has been raided by authorities. The development which was first reported at the local level and later found a place in Foss Patents blogs covers news related to wireless devices and also software patents. The allegation of the iPhone manufacturing company is that it is charging more than the established price cap of 30% for in-app purchases.
Ten Per Cent Extra
Reports bring out that the iPhone manufacturing company charges, ten per cent extra on the commission, meaning that the company charges the prescribed 30 per cent from a total of 110 per cent thus making it charge three per cent extra than the prescribed rate. Reportedly the other leading tech firm Google bases its charges on the thirty per cent commission which does not include the extra ten per cent. Reports bring out that the three per cent margin of profit received by the iPhone manufacturing company gives it an additional profit of 240 million dollars.
Reports also suggest that the iPhone manufacturing company also charges in excess of the prescribed limit of fifteen per cent when it comes to the first year subscription. Reportedly, the developers are charged 16.5% which also includes the 10% VAT charged by apple.
Investigating Agencies Previous Statement
In the previous month, the investigating agencies had said that, if the iPhone manufacturing company is found in violation of the norms, the KCC, the Korean Copyright Center, south Korea’s agency that deals with copyrighted related matters would impose a fine of two per cent on the total revenue earned by the company. The investigating agencies had earlier searched the offices of Apple, Google, and One Store to find out about the violations.
Violations In Other Countries Too
The iPhone manufacturer is believed to deploy a similar practice in other countries, with taxation. However, the alleged wrongdoing of the iPhone manufacturing company is yet to be taken into consideration. Reportedly it charges 2% in France and Italy and 5%, and 1% higher taxes in the country Turkey and UK respectively.
According to the Patent blogs, the iPhone maker charging 26% on margins puts Apple in a disadvantageous position. The 26% margin is reportedly twice higher than that charged for Apple in-app purchases.
In January, Apple announced that it would comply with a new South Korean law that bans app store operators from requiring developers to use their own in-app purchase systems. In late June, the change came into effect, enabling developers to offer alternative payment systems in South Korea.
