Seoul, April 11 (LatestNewsX.com) : South Korea’s antitrust regulator has imposed a fine of KRW 42.1 billion (approximately $31.8 million) on Google and its regional arms for engaging in unfair business practices aimed at consolidating its dominance in the Korean mobile gaming app market.
Between June 2016 and April 2018, Google allegedly made “shady agreements” with South Korean mobile game companies, preventing them from releasing their content on One Store, a major homegrown app market launched in January 2016 by South Korea’s three mobile carriers, along with Naver Corp.
According to the Fair Trade Commission (FTC), Google was aware of a potential violation of fair trade rules and required its employees to delete related emails and discuss issues offline to avoid leaving traces of such agreements.
The FTC also stated that the agreement helped Google solidify its dominance in the local app market, with the company expanding its presence from 80-85 percent in 2016 to 90-95 percent in 2018. One Store, on the other hand, fell from 15-20 percent to only 5-10 percent over the same period.
The Penalty
The FTC has imposed a fine of KRW 42.1 billion (approximately $31.8 million) on Google, Google Korea, and Google Asia Pacific, along with a corrective order.
The regulator claims that Google’s agreement with mobile game companies hindered innovation and consumer benefits in the app market and mobile gaming sector.
By blocking the release of games on One Store, Google also prevented competition, including diversifying content and consumer benefits.
Google’s Response
In response, Google said it does not agree with the Korean FTC’s decision, claiming it has not violated any local competition laws.
The U.S. tech giant said that it competes vigorously with other app markets and is proud of the benefits it delivers to developers, including the gaming industry and everyday users, through Google Play.
Unlike some mobile operating systems, Android gives developers complete control over how they distribute their apps, it added.
“Google makes substantial investments in the success of developers, and we respectfully disagree with the KFTC’s conclusions,” the company said in a statement.
It added that it will determine its future course of action against the FTC after carefully reviewing the written decision.
Implications
The penalty imposed on Google by the South Korean antitrust regulator marks the latest in a series of actions taken against the company worldwide. Google has faced several accusations of anti-competitive behavior in the past, prompting regulators in the United States, Europe, and other regions to launch investigations into its business practices.
The recent development in South Korea highlights the need for global technology companies to comply with local laws and regulations, particularly those related to fair competition.
It also underscores the importance of fostering healthy competition in the app market and mobile gaming sector to benefit consumers and promote innovation.
Impact on the Korean Mobile Gaming App Market
The impact of Google’s anti-competitive behavior on the Korean mobile gaming app market is undeniable. According to the data compiled by the FTC, Google’s market dominance expanded from 80 to 85 percent in 2016 to 90 to 95 percent in 2018. In contrast, One Store’s market share fell from 15-20 percent to only 5-10 percent over the same period.
This indicates that Google’s shady agreements with South Korean mobile game companies have effectively solidified its dominance in the local app market. By banning game companies from releasing their content on One Store and requiring them to release their content exclusively on its platform, Google has hindered innovation and consumer benefits in the app market and mobile gaming sector.
Google’s Response
Google has responded to the Korean FTC’s decision by stating that it has not violated any local competition laws and that it competes vigorously with other app markets.
It claimed that unlike some mobile operating systems, Android gives developers complete control over how they distribute their apps.
The U.S. tech giant also stated that it makes substantial investments in the success of developers and that it will determine its future course of action against the FTC after carefully reviewing the written decision.
Google has been fined 42.1 billion won (more than $31.8 million) by South Korea’s antitrust regulator for unfair business practices aimed at solidifying its dominance in the Korean mobile gaming app market.
The U.S.-based global tech giant made shady agreements with South Korean mobile game companies between June 2016 and April 2018, banning them from releasing their content on One Store, according to the Fair Trade Commission.
The agreement helped Google solidify its dominance in the local app market, expanding its market share from 80 to 85 percent in 2016 to 90 to 95 percent in 2018, while One Store’s market share fell from 15-20 percent to only 5-10 percent over the same period.
Google’s anti-competitive behavior has hindered innovation and consumer benefits in the app market and mobile gaming sector.
