Antitrust Penalty: South Korea Hits Google with $32M Fine for Anti-Competitive Mobile App Behavior

  • South Korea penalized Alphabet Inc's GOOG GOOGL Google 42.1 billion won ($32 million) for exploiting its influence in the mobile app market to drive away a local rival.
  • Google tried to block Korean platform rival One Store Co's growth, Bloomberg cites Korea's Fair Trade Commission's statement Tuesday. 
  • Google allegedly asked some Korean game companies, including NCSoft Corp and Netmarble Corp, and smaller firms and Chinese companies, to exclusively release their new games in Google's Play Store in exchange for Google promoting their games and providing further support abroad.
  • Google has denied offering benefits to developers who put their apps only on Google Play.
  • Korea's FTC said Google began making conditional offers in June 2016, when One Store began operations in Korea and continued through April 2018. 
  • The activity hindered One Store's ability to attract new games and resulted in a drop in sales while lifting Google's revenue by about 1.8 trillion won.
  • The Korean watchdog disclosed internal memos, documents, and e-mails from Google employees, alleging that the U.S. firm saw the entry of One Store as a threat to its Korean sales and decided to shut out its rival, even while it was aware its practices were anti-competitive.
  • The FTC ordered Google LLCGoogle Korea, and Google Asia Pacific to launch an internal monitoring system and report to the regulator for follow-ups. 
  • The FTC said that both Google's Play Store and One Store generate more than 90% of sales in Korea from selling games. It said that Google held about 80% - 95% market share in Korea's mobile Android app market between 2014 and 2019. 
  • One Store is a local platform created by Korea's three telecom companies SK Telecom Co, Ltd SKMKT Corp KTLG Uplus Corp, and the internet firm Naver Corp NHNCF
  • In the past months, Google has been amid multiple antitrust charges outside the U.S., including fines and suits in India and the U.K.
  • Price Action: GOOG shares traded lower by 0.07% at $106.88 premarket on the last check Tuesday.
  • Photo by Firmbee via Pixabay
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