South Korea’s antitrust company fines US $ 177 million


David Gray | Bloomberg | Getty Images

The South Korean competition agency announced Tuesday that it would fine Google 207.4 billion Korean won ($ 176.9 million) for allegedly using its dominant market position in mobile operating systems to stifle competition.

Google’s Android operating system currently holds the lion’s share of the smartphone market, ahead of Apple’s iOS platform.

According to the Korea Fair Trade Commission, the US tech giant is said to have used its market position to prevent smartphone manufacturers like Samsung from using operating systems developed by competitors.

Yonhap News added that the regulator, which published its ruling in Korean, said the tech giant required smartphone makers to agree to an “Anti-Fragmentation Agreement (AFA)” when they sign key contracts with Google through app store transactions. Complete licenses and early access to the operation system.

This agreement prevented device manufacturers from installing modified versions of the Android operating system known as “Android Forks” on their phones, Yonhap reported.

The regulator claimed that Google’s practice stifled innovation in developing new operating systems for smartphones, the news site added. According to Yonhap, the KFTC has urged the tech giant to stop compelling companies to sign AFAs and has ordered it to take corrective action.

A Google spokesman argued that the Android compatibility program has driven hardware and software innovation and brought success to Korean phone manufacturers and developers.

“The KFTC’s decision published today ignores these benefits and will undermine consumer benefits. Google intends to appeal the KFTC’s decision,” the spokesman told CNBC in a statement.

Tuesday’s fine is small compared to the tech giant’s quarterly numbers. In the past quarter, Google’s parent company Alphabet reported sales of $ 61.88 billion.

Still, Tuesday’s decision is the latest setback for the tech company in South Korea.

In late August, the country’s parliament passed a bill that would allow app developers to avoid high commissions from large app store operators, including Google, by instructing users to pay through alternative platforms.