South Korea fines Google $177 million for hampering mobile OS competition

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South Korea’s antitrust watchdog on Tuesday fined Google 207.4 billion won, approximately $177 million, after it found the US company abused its market position to block competing mobile operating systems (OS) from entering the market.

The Korea Fair Trade Commission (KFTC) said Google effectively prevented device manufacturers, such as Samsung and LG, from customising Android OS.

The creator of Android did this by forcing manufacturers to sign an anti-fragmentation agreement, the commission said.

Companies that signed this agreement could not use an OS fork — change the Android source code — or develop their own fork OS, KFTC said.

The agreements also prevented manufacturers from distributing their own software development kits, the antitrust watchdog said.

According to the commission, Google has been doing this since 2011, when it secured a market share of 72% in the mobile market with Android.

The company acted like a “private regulatory authority”, which caused mobile OS development projects run by companies such as Amazon and Alibaba to fail, KFTC said.

The US company’s restriction against manufacturers was “an unprecedented anticompetitive action” that “inhibited innovation” in the smart device OS space, it added.

KFTC started the investigation into Google’s OS practices back in July 2016. It held three plenary meetings over four months before reaching its decision. 

Google was unavailable for comment.

Earlier this month, South Korea’s National Assembly approved a Bill that will require Apple and Google to change the way its app store payment systems operate in the country. The new laws, which came into effect on Tuesday, ban companies from forcing developers to use their in-app purchase systems. 

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