South Korea’s competition watchdog says it plans to fine Google at least 207.4 billion ($177 million) for preventing smartphone makers like Samsung from using other operating systems
The announcement on Tuesday came as South Korea began implementing a revised telecommunications law that prohibits app market operators such as Google and Apple from requiring smartphone users to pay with its in-app purchase system. It is the first country to adopt such rules.
South Korea has always closely scrutinized how foreign technology companies behave in its market. Much of the focus in recent years has been on Google and Apple as authorities vowed to prevent them from abusing their dominant market position in the mobile Internet.
Joh Sung-wook, chairman of South Korea’s Fair Trade Commission, said Google has hindered competition by forcing its electronics partners to sign “anti-fragmentation” agreements since 2011. This has barred companies from installing modified versions of Google’s operating system on devices such as smartphones and smartwatches. This gives Google an easy way to strengthen its leadership in the mobile software and app market, he said.
Joh said manufacturers such as Samsung and LG had to agree to terms when signing contracts with Google for App Store licensing or early access to computer code so that they would be prevented from releasing new versions of their Android and other operating systems by Google. Make the device first.
Samsung, the maker of the globally popular Galaxy Android phone, suffered a major setback in 2013, when Google was forced to scrap its plans to use a customized version of the Google software on its Galaxy Gear smartwatches.
Samsung switched to a little-known operating system called Tizen, but abandoned the software after struggling with a lack of applications. The company’s new smartwatches are now powered by Google’s Wear OS. LG was also barred from releasing smart speakers based on customized Google software.
The fine announced for Google will be the ninth largest the FTC has ever imposed. The company could pay even more.
Another FTC official, Kim Min-jong, said the amount announced by his commission was tentative, based on revenue generated by Google in South Korea from 2011 to April of this year. She said the final fine, which could be announced in October or November, could be slightly higher.
Google’s South Korean office, which could challenge the fine with a lawsuit, did not immediately respond to requests for comment.
“We will ban (Google) from requiring device manufacturers to sign anti-fragmentation agreements in connection with (commercial contracts) regarding Play Store licensing and early access to the operating system,” Joh told a news conference. “
“Our corrective measures … will allow domestic appliance manufacturers to release ‘forked’ devices in domestic and foreign markets and allow foreign manufacturers to release ‘forked’ devices in the domestic market,” she said, by optimized operating systems. Referring to powered equipment.
The FTC began investigating the matter in 2016 and is investigating Google, including its behavior in the mobile application and advertising markets.
Earlier on Tuesday, the Korea Communications Commission, the country’s telecommunications regulator, said a revised telecommunications law has barred Google and Apple from requiring developers to use their in-app purchase systems.
The tech giant has faced global criticism for forcing developers to use an in-app purchase system, for which companies get commissions of up to 30%. The companies say the commission helps pay for the cost of maintaining the app markets.