South Korea's FTC Imposes $32 Million Fine on Google for Alleged Abuse of Market Dominance

South Korea's antitrust watchdog, the Fair Trade Commission (KFTC), has imposed a 42.1 billion won ($32 million) fine on Alphabet's Google, as per a report from TechCrunch.

The tech giant has been accused of blocking Korean developers from releasing mobile video games on a local competitor platform called One Store.

Google's Alleged Abuse of Market Dominance

According to the KFTC, Google required that Korean video game developers only distribute their new titles on the Play Store between June 2016 and April 2018.

In exchange, Google reportedly restricted the local game developers' ability to publish their work on One Store while providing in-app promotion and additional help for worldwide expansion.

One Store, a local competitor to Google's Play Store, was established in June 2016 by South Korea's three telcos, SK Telecom, KT, and LG Uplus, as well as internet giant Naver.

The KFTC reports that Google's local market share in the Android app market for mobile devices climbed from 80% to 85% in 2016 to about 90% to 95% in 2018.

The market share of One Shop, on the other hand, decreased from 15% to 20% in 2016 to roughly 5% to 10% in 2018.

Ensuring Fair Competition

By prohibiting the American tech giant from abusing its dominating position, the KFTC claimed that the action was intended to ensure fair competition in the app industry.

According to a press release from KTFC, selling games on Google Play and One Store accounts for more than 90% of all domestic sales.

According to the KFTC, Google's activities had an impact on gaming businesses, including both small and mid-sized game developers as well as major video game producers like NCSoft, Netmarble, and Nexon.

Google disputed any misconduct, saying that it had been an active participant in the KFTC's inquiry and decision-making process for the past five years and that it was confident no legal violations had occurred.

The business asserted that over the past ten years, Korean mobile game creators that have published their titles on Play have grown and successfully expanded across the globe.

In an emailed statement to TechCrunch, a spokesperson for Google said, "Google makes substantial investments in the success of developers, and we respectfully disagree with the KFTC's conclusions. We will carefully review the final written decision once it's shared with us to evaluate the next course of action."

This is not the first time Google has faced penalties in South Korea. The tech giant was hit with a $177 million fine by the KFTC in 2021 for allegedly abusing its position of market dominance in the Android operating system (OS) industry.