Google and Apple Ordered to Revise App Store’s No-Refund Policy in Korea

According to a report by The Korea Herald, South Korea’s antitrust watchdog has ordered Google and Apple to revise unfair provisions, including the no-refund policy in their respective mobile app stores, making it the first time that an antitrust body has taken action against international app store operators in the country.

App stores

The source notes that following the FTC orders, the Google Play store will design a customer refund system based on web developers’ refund polices, while Apple’s iTunes App store will have to send a notice to users when it changes the terms in its contract. ‘‘We expect the measure, aimed at protecting consumers, will have a ripple effect on similar cases throughout the world,” the Korea Fair Trade Commission (KFTC) said in a press release. 

Hwang Won-chul, head of the KFTC said that these corrective orders will become “benchmark cases for other countries”.

“While Google will limit its response to the FTC to the domestic market, Apple said it would consider applying the revised contract terms globally,” he added.

Behind the FTC move was continued requests by the Citizens’ Coalition for Economic Justice, a nongovernmental organization. The civic group asked the FTC to correct unfair sales practices of domestic and foreign mobile app stores last March. In response to the demand, the antitrust watchdog ordered domestic companies including KT, SK Planet, LG Electronics and LG Uplus to correct their unfair business terms in contracts for the webstores in March of this year.

Yoon Chul-hwan, an official at the Citizens’ Coalition for Economic Justice, stated that South Korea is ahead of other countries in dealing with unfair business practices as it has exclusive laws to regulate unfair clauses.