South Korea’s antitrust regulator has fined Alphabet Inc’s Google 207 billion won (US$176.64 million) for blocking customized versions of its Android operating system (OS), in the US technology giant’s second setback in the country in less than a month.
The Korea Fair Trade Commission yesterday said that Google’s contract terms with device makers amounted to an abuse of its dominant market position that restricted competition in the mobile OS market.
Google said in a statement that it intends to appeal the ruling, saying it ignores the benefits offered by Android’s compatibility with other programs and undermines advantages enjoyed by consumers.
“The Korea Fair Trade Commission’s decision is meaningful in a way that it provides an opportunity to restore future competitive pressure in the mobile OS and app market markets,” commission Chairwoman Joh Sung-wook said in a statement.
The regulator said that this could be the ninth-biggest fine it has ever imposed.
The commission said that Google hampered competition by making device producers abide by an “anti-fragmentation agreement” when signing key contracts with it regarding app store licenses.
Under the agreement, manufacturers could not equip their handsets with modified versions of Android, known as “Android forks.”
That has helped Google cement its market dominance in the mobile OS market, the commission said.
Under the ruling, Google is banned from forcing device makers to sign anti-fragmentation agreement contracts, allowing manufacturers to adopt modified versions of Android OS on their devices.
In one instance, Samsung Electronics Co launched a smartwatch with a customized OS in 2013, but switched to a different OS after Google regarded the move as a breach of the agreement violation, the commission said.
Samsung Electronics declined to comment.
The fine was issued on the day that an amendment to the South Korean Telecommunications Business Act — popularly dubbed the “anti-Google law” — came into effect.
The bill was passed late last month and it bans app store operators such as Google from requiring software developers to use their payment systems.
The requirement had effectively stopped developers from charging commission on in-app purchases.
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