South Korea fines Google $177 million for market monopoly

Recently, according to Reuters, South Korea's antitrust regulator has fined Alphabet Inc's (GOOGL.O) Google 207 billion won ($176.64 million).

South Korea's antitrust regulator said the fine was due to Google blocking a customised version of its Android operating system (OS), the second setback for the US tech giant in less than a month.

The Korea Fair Trade Commission ( KFTC) announced on Tuesday that the contract terms signed by Google and device manufacturers constitute violations of its dominant market position and restrict competition in the mobile operating system market. The KFTC said that Google made device manufacturers comply with the "Anti-Fragmentation Agreement (AFA)" when signing key contracts with it regarding app store licenses, thereby creating a business monopoly and hindering normal competition.

Under the AFA, manufacturers cannot equip their phones with modified versions of Android, known as "Android forks." The KFTC said this helps Google consolidate its dominance in the mobile operating system market. According to the ruling, Google is prohibited from forcing device manufacturers to sign AFA contracts that allow manufacturers to adopt modified versions of the Android operating system on their devices.

The bill, passed in late August, prohibits app store operators such as Google from requiring software developers to use their payment systems. The requirement effectively prevents developers from charging commissions on in-app purchases. Google later said in a statement that it intends to appeal the ruling, saying it ignores the benefits of Android's compatibility with other programs and undermines the advantages enjoyed by consumers.

KFTC Chairman Joh Sung-wook said in a statement that the Korea Fair Trade Commission's decision is significant because it eliminates monopolies and provides an opportunity to restore competitive pressure in the mobile operating system and application markets in the future. The antitrust regulator said this could be its ninth-largest fine ever.

Last year, India's antitrust agency ordered an investigation into Google, saying that Google abused its market position to promote its payment app and force app developers to use its in-app payment system. This year, South Korea also made an antitrust ruling against Google, and one wave of turmoil has not yet subsided.

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