Google Hit With $177M Fine From South Korea for Hampering Rival Android Developers

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Google, whose mobile operating system powers more than 80% of smartphones around the globe, is being accused of using its powerful market position to dominate the competition, Bloomberg reports. South Korea has fined Alphabet Inc.’s Google $176.8 million for obstructing the development of rival Android developers.

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The Korea Fair Trade Commission said the tech giant’s anti-fragmentation agreements with manufacturers such as Samsung Electronics and LG Electronics prevent developers from making or using modified versions of the Android operating system. Google has been banned from forcing manufacturers to sign AFA contracts, Bloomberg noted, and ordered that the company modify existing ones.

In response, Google argued that Android’s compatibility program has encouraged innovation, including among Korean phone makers and developers. “The KFTC’s decision released today ignores these benefits, and will undermine the advantages enjoyed by consumers,” the company said in a statement.

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Meanwhile, regulators say that market competition is fundamental. “We expect the latest measures will help set the stage for competition to revive in the mobile OS and app markets. This is also expected to help the launch of innovative goods and services in smart device markets,” the KFTC said, as reported by Yonhap News.

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“The Fair Trade Commission’s action was not limited to mobile devices, but corrective measures included emerging smart device-related areas such as smart watches and smart TVs,” Chairperson Joh Sung-wook said in a briefing on Tuesday and reported by Bloomberg. “Therefore, we expect that new innovations will occur as some competitive pressures in this area are activated.”

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In a separate action in August, the National Assembly supported an act to cut back on the control that Google and Apple have over payments on their app stores, Yonhap News added. South Korea has become the first nation to enact such legislation.

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Last updated: September 14, 2021

About the Author

Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but is now based out of Ohio where she attended The Ohio State University and lives with her two toddlers and fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.

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