South Korea’s anti-trust regulator has fined Google KRW207 billion ($177 million) for abusing its market dominance in the Android operating system (OS) market.
Google has restricted market competition by prohibiting local smartphone makers like Samsung Electronics and LG Electronics from customizing their Android OS, through Google’s anti-fragmentation agreements (AFA), according to a statement by the Korea Fair Trade Commission (KFTC).
Under the AFA, smartphone developers are not allowed to install or develop “Android forks”, modified versions of Android.
The ruling requires Google LLC, Google Asia Pacific and Google Korea – all subsidiaries of the US company Alphabet – to give up the practice.
The KFTC noted that the fine’s final value is not yet fixed and could rise after further investigation.
Within hours, Google said it would appeal. Google argued that, while the court is arguing that the US company is taking advantage of its dominant market status, the court is ignoring the benefits it’s Android software provides for companies that install it.
The company said Tuesday’s ruling ignores the hardware, software, and innovation benefits its product provides, both for the Korean manufacturers and for their customers.
But the KFTC argues that South Korean-based smartphone makers like Samsung or LG that want to use Android apps or services are required to sign contracts that come with multiple limitations. That, the authority argued, limits competition.
The commission has been investigating Google over the anti-competition practice in the OS market since July 2016, a spokesperson at KFTC said.
(With inputs from agencies)
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