A South Korean competition regulator, the Korea Fair Trade Commission, on Tuesday announced that it has fined Alphabet Inc’s Google $177-million for allegedly using its dominant position in the mobile operating system (OS) market to stifle competitors.
Google’s Android OS currently holds the majority of the smartphone market share, being the OS of choice of most smartphone brands that aren’t Google’s most immediate competitor, Apple.
According to CNBC, the US tech giant has been allegedly using its market position to block smartphone makers like Korean-based Samsung from using operating systems developed by rivals.
A report from Yonhap News details that the regulator alleges that Google has been requiring Korean smartphone makers to agree to an “anti-fragmentation agreement” (AFA) when signing key contracts with the tech giant over app store licenses and early access to the Android OS.
This AFA prevented device makers from installing modified versions of the Android OS, colloquially known as ‘Android Forks’ on their devices. The Commission is alleging that Google’s practice is stifling innovation in the development of new OSs for smartphones, and has asked the tech giant to stop forcing companies to sign AFAs and ordered Google to begin taking ‘corrective steps’.
Google Seeks to Appeal the Decision
In response, a Google spokesperson has argued that Android’s compatibility program has indeed spurred innovation in both hardware and software, and brought success to Korean smartphone manufacturers and developers.
“The KFTC’s decision released today ignores these benefits and will undermine the advantages enjoyed by consumers. Google intends to appeal the KFTC’s decision,” the spokesperson told CNBC.
This latest $177-million fine is considerably small compared to Google’s quarterly figures. Last quarter, Alphabet, Google’s parent company, reported $61.88-billion in revenue.