South Korea hits Google with $177M in fines over market power abuse

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Korea Fair Trade Commission chairwoman Joh Sung-wook speaks during a brief held at the government office complex in Sejong, on Tuesday. YONHAP NEWS AGENCY

South Korea‘s antitrust regulator on September 14 said it has decided to fine US-based tech giant Google 207.4 billion won ($180 million) for abusing its market power with the Android mobile operating system.

In addition to the fine, the Korea Fair Trade Commission (FTC) ordered Google to stop forcing device manufacturers to sign an anti-fragmentation agreement, which has prevented the manufacturers from using operating systems developed by Google’s rivals or other variants of Android.

 

The FTC began investigating accusations of unfair practices involving the US firm since 2016.

According to the FTC’s findings, Google has used anti-fragmentation agreements to increase its market dominance since 2011.

In 2013, Samsung Electronics launched the original Galaxy Gear based on an Android fork, but the company had to give up the modified version of Android OS as Google complained of a breach of the agreement by Samsung.

In 2011, Amazon also tried to collaborate with LG Electronics to launch tablet computer Kindle Fire on a forked variant of Android. But the launch never took place as LG Electronics acknowledged that it could violate its anti-fragmentation agreement with Google.

The FTC noted device makers had to abide by their agreements with Google because otherwise they would no longer have six-month early access to the Android OS, which is required for smartphone development.

Google Play, the dominant app distributor for Android, was another reason that device makers had to enter into exclusive contracts with Google, the FTC explained.

 

According to the FTC, Google’s unfair practices have helped Google solidify its dominance in the mobile platform market. Google’s share in the OS market reached 97.7 per cent in 2019, from 38 per cent in 2010.

The FTC expects the latest measures against Google will help local device manufacturers, such as Samsung and LG, to initiate OS development programmes for their future devices and services.

The FTC also expressed hopes that the latest measures will help revive competition in the OS market.

Meanwhile, the FTC is separately investigating whether Google forced mobile game applications to be only released on its own app store.

The regulator is also looking into the US-based tech giant’s exclusive billing system, which takes a 30 per cent commission from purchases of digital products.

THE KOREA HERALD/ASIA NEWS NETWORK