South Korea fined Alphabet Inc’s Google $177 million for hampering the development of rivals to its Android operating system, sustaining a campaign targeting the US search giant’s dominance in smartphone software.
Regulators accuse Google, whose mobile operating system powers more than 80%
of smartphones around the world, of using its immense bargaining power to squeeze out the competition. The Korea Fair Trade Commission said Google’s anti-fragmentation agreements (AFA) with manufacturers like Samsung Electronics Co and LG Electronics Inc prevented gadget makers from developing or using modified versions of the Android OS. The watchdog banned Google from forcing manufacturers to sign AFA contracts and
ordered that it modify existing ones.
Korea in August became the first country to pass a law forcing Apple Inc and Google to open up their app stores to outside payment systems, setting a potentially radical precedent for their lucrative operations everywhere from India to the US. That bill becomes effective from September 14, the Korea Communications Commission said in a statement. Tuesday’s 207.4 billion won fine is one of the highest levied in the country over abuse of market dominance, with only Qualcomm Inc.’s mobile chipsets drawing higher sanctions.
Google responded by saying Android has accelerated innovation and improved the user experience, and that it will appeal the decision.
“It shows the KFTC is taking action after years of sitting on the fence,” said Tom Kang, research director at Counterpoint.
“It has made the verdict that Google enjoys monopoly power so the regulator will continue
to monitor and fine the company and other internet giants like
it. It’s a big win for increased competition.”
The new measures from the KFTC are intended to spur competition by freeing companies to create so-called forks of Android — versions built from the same basic building blocks but modified to suit the manufacturer’s aims, such as targeting different device classes or use cases — without fear of punitive measures from Google.