Wednesday, 22 September 2021

South Korea's imposes massive fine on Google for abusing its leadership position

By Gagan Kaur, Total Telecom
Tuesday 14 September 21

South Korea's antitrust regulator, Korea Fair Trade Commission (KFTC), has imposed a fine of $176.64 million on Alphabet's Google for blocking access to the customized versions of its Android operating system (OS) as per a Reuters report. KFTC accuses the internet giant of using its market leadership position to restrict competition in the mobile operating systems market…

South Korea's antitrust regulator, Korea Fair Trade Commission (KFTC), has imposed a fine of $176.64 million on Alphabet's Google for blocking access to the customized versions of its Android operating system (OS) as per a Reuters report.

KFTC accuses the internet giant of using its market leadership position to restrict competition in the mobile operating systems market. It alleges that Google's agreements with device makers like Samsung and LG, prevented them from developing or using modified versions of Android OS. Google Android OS is a dominant operating system and is present in more than 80% of smartphones across the world. The fine of $176.64 million is one of the highest charges ever levied by KFTC.

The Korean regulator has asked Google to modify the existing contract with the device manufacturers and has banned Google from using its dominant market position to force device manufacturers to sign Anti-Fragmentation Agreements (AFA) contracts.

As per the AFA agreements, the device makers cannot introduce a modified version of Android on their devices. This means that the manufacturers are forced to use Google's Android version. It not only thwarts innovation in the market but also helps Google maintain its market leadership position.

South Korea has been taking an aggressive stance against Google and other technology majors. Last month it passed a law forcing smartphone major Apple and Google to open up their app stores to external payment systems. South Korea was the first country to pass such a law. Several countries, including India and Google's home country US, are questioning policies adopted by internet companies. South Korea has taken a precedence and this can potentially snowball into a global problem for Google.

Google plans to appeal against KFTC's decision. The company said that its policies are designed to enhance user experience. "The KFTC's decision released today ignores these benefits, and will undermine the advantages enjoyed by consumers," says the statement issued by Google.

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