South Korea fines Google £ 127million for blocking smartphone operating systems
The South Korean competition watchdog plans to fine Google at least 207.4 billion won (£ 127 million) for allegedly blocking smartphone makers like Samsung from using d ‘other operating systems.
Google has announced plans to challenge the fine, accusing South Korean officials of ignoring how its software policy benefits hardware partners and consumers.
The announcement came as South Korea also began enforcing a revised telecommunications law that bans app market operators like Google and Apple from requiring smartphone users to pay with their in-app shopping systems.
It is the first nation to adopt such regulations.
South Korea has always closely watched the behavior of foreign tech companies in its market. In recent years, much of the focus has been on Google and Apple as officials pledged to prevent them from abusing their dominant position in the mobile internet market.
Joh Sung-wook, chairman of South Korea’s Fair Trade Commission (FTC), said Google has been hampering competition since 2011 by forcing its electronic partners to sign “anti-fragmentation” deals.
This has prevented companies from installing modified versions of Google’s operating systems on devices such as smartphones and smartwatches. This gave Google an easy way to consolidate its leadership in the software and mobile app markets, she said.
Ms Joh said manufacturers like Samsung and LG need to agree to terms when signing contracts with Google for an app store license or early access to computer codes so they can create devices in advance. before Google released new versions of its Android and other operating systems.
In an emailed statement, Google said the FTC was unaware of how Android’s compatibility program, which defines the requirements of device manufacturers and developers to ensure compatibility with the operating system, boosted “Incredible hardware and software innovation and has brought tremendous success to Korean OEMs (original equipment manufacturers) and developers.”
Google added, “This in turn has led to more choice, better quality and better user experience for Korean consumers.
“The KFTC ruling released today ignores these benefits and will undermine the benefits enjoyed by consumers. Google intends to appeal the KFTC decision.
Ms Joh pointed out that Samsung, the maker of the globally popular Android Galaxy phones, suffered a huge setback in 2013 when Google forced them to abandon plans to use a customized version of Google software on their watches. smart Galaxy Gear.
Samsung switched to a little-known operating system called Tizen, but ditched the software after struggling with a lack of apps.
The company’s new smartwatches are now powered by Google’s Wear OS. LG has also been barred from releasing smart speakers based on custom Google software.
The fine announced for Google would be the ninth-highest ever imposed by the FTC, and the company could end up paying even more.
Kim Min-jeong, another FTC official, said the amount announced by his commission was provisional, based on the revenue Google generated in South Korea from 2011 to April this year.
She said the finalized fine, which could be announced in October or November, could be slightly higher.
“We will ban (Google) from requiring device makers to sign anti-fragmentation agreements regarding (commercial contracts) regarding Play Store licenses and early access to operating systems,” Ms. Joh at a press conference.
“Our corrective measures… will enable domestic appliance manufacturers to launch ‘fork’ devices in domestic and foreign markets and foreign manufacturers to market ‘fork’ devices in the domestic market,” she said, pointing out. reference to devices powered by custom operating systems.
The FTC began investigating the case in 2016 and is conducting further investigations into Google, including its behavior in mobile apps and ad markets.
Earlier on Tuesday, the Korea Communications Commission, the country’s telecommunications regulator, said a revised telecommunications law prohibiting Google and Apple from requiring developers to use their in-app purchasing systems had entered. in force.
Tech giants face global criticism for forcing developers to use integrated purchasing systems, for which companies receive commissions of up to 30%. Companies claim that the commissions help pay for the cost of maintaining app marketplaces.