Google, Apple app prices up 10% on new tax rule

Prices for smartphone applications sold in South Korea through Google and Apple platforms rose 10 percent starting this month, industry sources said Friday, as the government started imposing taxes on overseas-based open markets.

According to the sources, U.S. tech giants Google Inc. and Apple Inc. rolled out new price policies earlier this month and notified application developers of such changes.

Google's price hike came into effect on July 1, while Apple increased prices on Thursday.

The move came as South Korea began imposing a 10 percent value-added tax on foreign-based open markets, such as Google Play or Apple Store, that operate here, starting this month.

The previous law only required sales platforms with South Korea-based servers, such as those operated by SK Telecom Co. or KT Corp., to follow the local taxation regulations, raising controversy over preferential treatment of foreign players.

Market watchers said the imposition of the new tax has pushed more of the burden on app users by jacking up their prices.

Apple, meanwhile, said the company plans to raise its app prices also in Mexico, South Africa and Turkey.