14 Sept 2021
Google Sued for $177M by South Korea over Android Customization
The Index Today
Alphabet Inc’s Google has been fined for $176.64 million by South Korea’s antitrust regulator for blocking customized versions of its Android operating systems. This comes as the second major setback to occur in less than a month.
According to The Korea Fair Trade Commission KFTC, Google has been accused of abusing contract terms made with device makers enabling it to restrict competition in the market. Google hit back with a statement, saying it will appeal the ruling as it does not take into account the benefits offered by Android’s compatibility with other programs. The antitrust has also mentioned that this is ninth biggest fine it has ever imposed.
Joh Sung-wook, KFTC Chairperson released a statement saying, “The Korea 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.”
Google used anti-fragmentation agreement AFA with device producers which obstructed market competition. In the AFA, device manufactures are not allowed to provide modified versions of the Android, also known as “Android Forks” in handsets. This has allowed Google to keep a dominant market position facing little competition.
According to the new ruling, Google is no more allowed to prevent manufactures from using modified android versions as AFA contracts are not acceptable.
South Korea’s Telecommunications Business Act, also known as the “anti-Google law” came into effect the same day of the fine being imposed on the tech giant. Under new law, Google cannot charge commission from developers on in-app purchases or use their payment systems.