Big blow to Google: South Korea fined for limiting competition in mobile OS market

In a major blow to Google, South Korea has fined the tech giant around Rs 1338 crore (USD 176.64 million) for blocking optimized versions of its Android operating system (OS). This is Google’s second setback in the country in less than a month.

The Korea Fair Trade Commission (KFTC) said on Tuesday that the terms of Google’s contract with device makers abuse its dominant market position that has restricted competition in the mobile OS market. “The Korea Fair Trade Commission’s decision is meaningful in the way that it provides an opportunity to restore future competitive pressure in the mobile OS and app market markets,” KFTC President Joh Sung-wook said in a statement.

The KFTC allegations pointed out that the US-based firm prevented local smartphone makers such as Samsung Electronics Co and LG from using operating systems developed by rivals.

During this, Google In a statement it intends to appeal the ruling, saying it ignores the benefits offered by Android’s compatibility with other programs and undermines the benefits enjoyed by consumers.

What are the charges?

The KFTC noted that Google manipulated competition by requiring smartphone makers to secure an Anti-Fragmentation Agreement (AFA).

As per the regulator, smartphone makers will have to sign an AFA contract with Google for an App Store license and early access to the OS.

The AFA discourages smartphone manufacturers to install modified versions of the Android operating system known as ‘Android forks’.

The regulator also noted that smartphone makers were also not allowed to develop their own Android forks.

The Korea Fair Trade Commission said this has helped Google consolidate its market dominance in the mobile OS market.

What is Anti-Google Law?

The bill was passed in late August by South Korea’s parliament to curb the dominance of Google, the Apple Commission.

This prohibits major app store operators such as Google and Apple from forcing software developers to use their payment systems.

This effectively prevents app store operators such as Google and Apple from charging commissions on in-app purchases.

Google has been banned from forcing device makers to sign AFA contracts that allow manufacturers to adopt modified versions of the Android OS on their devices.

(with Reuters inputs)

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