South Korea fines Google almost $180m for market abuse

South Korea’s antitrust watchdog fined Google nearly $180 million on Tuesday for abusing its dominance in the mobile operating systems and app markets, it said, the latest in a series of regulatory moves against tech giants around the world.

The penalty came weeks after South Korea passed a law banning major app store operators such as Google and Apple from forcing software developers to use their payment systems, effectively declaring their lucrative Play Store and App Store monopolies illegal.

And last week a US judge ordered Apple to loosen control over its App Store payment system in an antitrust battle with Fortnite maker Epic Games.

Google and Apple dominate the online app market in South Korea, the world’s 12th largest economy and known for its technological prowess.

The Korea Fair Trade Commission (KFTC) has investigated Google since 2016 for allegedly preventing local smartphone makers such as Samsung Electronics from customising its Android OS.

It said Google hampered market competition through an “anti-fragmentation agreement” preventing smartphone makers installing modified versions of Android, known as “Android forks”, on their devices.

“Because of this, device makers could not launch innovative products with new services,” the KFTC added in a statement.

“As a result, Google could further cement its market dominance in the mobile OS market.”

It fined Google 207.4 billion won ($176.8 million) and ordered the global tech giant to take corrective steps.

Google said the decision “will undermine the advantages enjoyed by consumers” and added it plans to appeal, according to Yonhap news agency.

“Android’s compatibility programme has spurred incredible hardware and software innovation, and brought enormous success to Korean OEMs (original equipment manufacturers) and developers,” it cited Google saying in a statement.

“This, in turn, has led to greater choice, quality and a better user experience for Korean consumers.”

Google has maintained that its Play Store commissions charged are standard in the industry and fair compensation for building safe marketplaces where developers can reach people around the world.

The Play Store had revenues of almost 6 trillion won ($5.2 billion) in 2019, accounting for 63 per cent of the country’s total, according to data from Seoul’s science ministry.