Tech giant Google has been fined $177 million by South Korea for abusing its dominance in the smartphone market. The government criticized the Masters of the Universe for “anti-fragmentation” agreements
Apple Insider reports that South Korea has fined tech giant Google 207.4 billion Won (approximately $177 million) this week for allegedly leveraging its power in the smartphone market to stunt the development of competing phone makers.
The South Korean antitrust watchdog, the Korea Fair Trade Commission (KFTC), criticized Google’s anti-fragmentation agreements in its decision. The Google agreements restrict handset manufacturers such as Samsung and LG from creating their own versions of Google’s Android operating system.
Google’s Senior Vice President Sundar Pichai gives a keynote address during the opening day of the 2015 Mobile World Congress (MWC) in Barcelona on March 2, 2015. Phone makers will seek to seduce new buyers with even smarter Internet-connected watches and other wireless gadgets as they wrestle for dominance at the world’s biggest mobile fair starting today. AFP PHOTO / LLUIS LLENE (Photo by Lluis GENE / AFP) (Photo by LLUIS GENE/AFP via Getty Images)
Google’s attempts to limit fragmentation of Android aims to restrict the number of publicly available forks of the operating system by placing strict punitive measures on phone makers, including restricting access to Google apps. This practice by Google has been the subject of a number of other government inquiries, including an investigation by the European Commission in 2018 that resulted in Google being served a $5 billion fine.
The KFTC fined Google about $177 million and banned the company from forcing phone manufacturers to sign AFA contracts. The KFTC also stipulated that Google modify its existing contracts to match the ruling’s requirements.
KFTC Chairperson Joh Sung-wook said this week: “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. Therefore, we expect that new innovations will occur as some competitive pressures in this area are activated.”
Google’s Play Store is also under investigation from the KFTC over its implementation of in-app purchases and its advertising business is being investigated as part of three separate inquiries.
Breitbart News recently reported that South Korea passed a bill designed to stop tech giants such as Google and Apple from preventing developers from using third-party payment systems.
In this photo provided by South Korea Presidential Blue House, South Korean President Moon Jae-in talks on the phone with Japanese Prime Minister Yoshihide Suga at the presidential Blue House in Seoul, South Korea, Thursday, Sept. 24, 2020. Suga on Thursday held his first telephone call with his South Korean counterpart since taking office, telling Moon that the neighbors should work to resolve their strained relations.(South Korea Presidential Blue House via AP).
The law is likely to cause major issues for Apple and Google who both demand that all in-app purchases made via their devices go through their respective payment processors. This allows the companies to take a 15 to 30 percent cut of all payments made via their platforms.
Under the new law, if tech companies fail to allow developers to use alternate payment processors, they could face fines of up to 3 percent of their revenue in South Korea. The law makes amendments to South Korea’s Telecommunications Business Act and could impact how Google’s Play Store and Apple’s App Store operate worldwide.
Read more about Google’s latest fine at Apple Insider here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address lucasnolan@protonmail.com