Google hit with $177 million antitrust fine in South Korea

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Google has been fined $177 million by South Korea’s antitrust regulator for anticompetitive behaviour.

The Korea Fair Trade Commission (KFTC) issued the 207.4 billion won fine to Google for alleged abuse of its dominant market position in the mobile operating system and app markets.

As the Yonhap News Agency reports, the KFTC has been investigating Google’s behaviour since 2016 over claims that it obstructed local smartphone makers (chiefly Samsung now that LG is out of the smartphone game) from using smartphone operating systems other than Android.

The charge seems to specifically centre around the fact that Google requires its partners to sign an anti-fragmentation agreement (AFA) when signing up for app store licenses and early access to the Android OS.

Under this AFA, manufacturers are not allowed to use ‘forked’ versions of Android, or those that have been heavily modified.

While it might seem like a hefty fine on the surface, Google is estimated to have a cash pile of around $135 billion. The KFTC’s fine would represent a fractional hit to Google’s finances.

Likely of more concern to Google will be the KFTC’s accompanying requirement that Google take steps to correct its behaviour. The internet giant has been ordered to stop enforcing its AFA requirements.

Google has issued a response, via CNBC, in which it claims that the Android compatibility program has stimulated hardware and software innovation, and broadly benefitted Korean phone makers and developers.

“The KFTC’s decision released today ignores these benefits, and will undermine the advantages enjoyed by consumers,” a company spokesperson said. “Google intends to appeal the KFTC’s decision”

Korea’s regulator is also investigating two cases relating to the Google Play Store. One concerns the company allegedly forcing mobile game makers to launch exclusively for the Google Play Store, and the other relates to plans to charge a 30 percent fee on in-app purchases made in South Korea.

The KFTC is also looking into Google’s digital ads business, which is responsible for most of the noughts on the end of that chunky bank balance.

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