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As the biggest provider of internet search services as well as app hosting-related services, Google is often in the crosshairs of anti-competitive investigations from regulators around the world.
Google, the subsidiary of American multinational tech giant, Alphabet Inc (NASDAQ: GOOGL) has been fined by the South Korean Fair Trade Commission (KFTC) for anti-competitive practices targeted toward rival app hosting platforms. As reported by TechCrunch, the fine was pegged at around 42.1 billion won worth approximately $32 million, and it targeted anti-competitive practices from June 2016 to April 2018.
Per the complaint against the tech giant, it prevented game developers from launching their apps on One Store, its rival platform in return for offering Google’s in-app exposure and further support for global expansion.
Google dominates many aspects of the internet in different regions and South Korea is no exception. In the mobile game development aspect, Google maintains as high as 90 to 95% dominance in South Korea while One Store accounted for between 5% and 10% respectively.
According to the KFTC sanctions update, the duo of Google and One Store generate as much as 90% of their domestic sales from selling in-app games, and maintaining extra dominance implies a revenue crunch for the other.
According to the South Korean regulator, the move to sanction Google will be the second time it will be fined by the American tech giant in what it described as its own way of promoting healthy competition amongst local players.
One Store is a product of four mainstream tech giants including internet outfit Naver as well as three telecommunications firms, SK Telecom, KT, and LG Uplus. The company was founded in 2016. According to the KFTC complaint, the anti-competitive stance of Google affected most game developers including but not limited to both big and small-sized firms.
As revealed, the big gaming companies impacted include NCSoft, Netmarble, and Nexon.
Google Response to the South Korean Regulators Claim
As the biggest provider of internet search services as well as app hosting-related services, Google is often in the crosshairs of anti-competitive investigations from regulators around the world in similarity to that from the South Korean watchdogs.
In response to the latest fine, an Alphabet spokesperson said a careful review of the allegations and the final verdict is ongoing, and that it will carve out a path forward once it is done with its assessment.
“We have cooperated diligently with the KFTC’s investigation and deliberation process for the past five years and believe that there has been no violation of the law,” the Google spokesperson said in an emailed statement. “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.”
Google is now a constant scapegoat for the South Korean regulator which fined the company the sum of $177 million for unduly utilizing its dominance in the Operating System niche.