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Google Fined $177 Million by the Korean FTC for Abuse of Market Power

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The South Korean competition authority, the Korea Fair Trade Commission (KFTC), has fined Google 207.4 billion won ($176.80 million) for abusing its market power with Android.

The KFTC also ordered the tech giant to stop forcing phone manufacturers from signing anti-fragmentation agreements (via The Korea Herald).

This agreement restricts companies from using rival operating systems or modified versions of Android. The South Korean agency began investigating Google’s practices back in 2016. The now published findings of the report mention that Google abused its position in the market with anti-fragmentation agreements since 2011.

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Google has blocked the launch of multiple devices due to its anti-fragmentation agreement. LG and Amazon’s collaboration with a Kindle Fire variant never saw the light of the day. LG later said that the launch was canceled over fears of breaching Google’s anti-fragmentation agreement.

Regulators are also eyeing Google’s 30% commission on Play Store purchases

Samsung developed a custom version of Android for the 1st gen Galaxy Gear back in 2013. However, Google made its displeasure known to the company, leading to the platform’s demise.

Additionally, the Korean FTC found in its report that device makers had to honor the agreements to get early access to Android. This early access is crucial for device manufacturers to develop updates for their phones and tablets. The regulator also cited Google Play Store as a factor that led manufacturers into signing these agreements.

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The Korean regulator hopes that the $177 million fine on Google will help local phone companies. These include LG and Samsung who can now hopefully start developing operating systems for their upcoming devices.

Google’s practices have no doubt led to a sharp spike in its market share. In 2019, the company’s OS market share was at 97.7% up from 38% in 2010.

Separately, the Korean FTC is reportedly investigating Google for allegedly forcing mobile game developers to release their games exclusively on the Play Store. The regulators also have an eye on Google’s 30% commission from developers on digital sales.

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It’s clear that the $177 million fine won’t mean much for Google. However, authorities hope that this serves as a deterrent for future violations. Google was recently fined €500 million by the French competition authority over a failure to negotiate agreements with news agencies for their content.