Google has been fined KRW 207 billion (about $177 million) by the Korea Fair Trade Commission (KFTC) for abusing its dominant position in the mobile OS market (via Reuters). The South Korean antitrust regulator has accused Google of blocking customized versions of Android by requiring smartphone makers to sign an “anti-fragmentation agreement.”
The agreement apparently prohibits manufacturers from shipping phones with modified versions of Android, also known as “Android forks.” This, according to the regulators, has allowed Google to bolster its market dominance. It has further alleged that rivals such as Amazon and Alibaba failed to succeed in the mobile operating system market due to Google’s anti-competitive practices. Google’s anti-fragmentation agreement is also said to have forced Samsung to switch to a different OS for its smartwatches in 2013.
In a statement sent to Android Central, a Google spokesperson said:
Android’s compatibility program has spurred incredible hardware and software innovation, and brought enormous success to Korean OEMs and developers. This in turn has led to greater choice, quality and a better user experience for Korean consumers. The KFTC’s decision released today ignores these benefits, and will undermine the advantages enjoyed by consumers. Google intends to appeal the KFTC’s decision.
The ruling comes just weeks after South Korea passed an amendment to the Telecommunications Business Act, which bans Google, Apple, and other large app store operators from forcing developers to use their own payment systems. In case the companies fail to comply with the new law, they could be fined up to 3% of their South Korea revenue by regulators. Until last year, Apple and Google were taking a 30% cut from developers for each transaction.
It isn’t just South Korea that is targeting Google and Apple for their app store policies. Last month, a new bill was introduced in the senate to protect competition and strengthen consumer protections in the app market. New York Attorney General Letitia James and a coalition of state attorney generals also filed an antitrust lawsuit against Google over its Play Store policies in July.