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Seoul, South Korea (AP) — South Korea’s competition watchdog plans to fine Google at least 207.4 billion won ($177 million) for allegedly preventing smartphone makers like Samsung from using other operating systems. .
Google said it plans to appeal the penalty. He accused South Korean officials of ignoring how the software policy benefits hardware partners and consumers.
Tuesday’s announcement came as South Korea also began enforcing a revised telecommunications law that bans app market operators like Google and Apple from making payments from smartphone users via in-app purchase systems. It is the first country to adopt such regulations.
South Korea has always closely scrutinized how foreign tech companies are behaving in its market. In recent years, much of the focus has been on Google and Apple, as authorities promised to prevent them from abusing their dominant market position in the mobile internet.
Joh Sung-wook, head of South Korea’s Fair Trade Commission, said Google has hindered competition since 2011 by forcing its electronic partners to sign “anti-fragmentation” agreements. This prevented companies from installing modified versions of Google’s operating systems on devices such as smartphones and smartwatches. This gave Google an easy way to consolidate its leadership in the mobile software and app markets, he said.
John said manufacturers like Samsung and LG must agree to terms when signing contracts with Google for app store licensing or early access to computer code so that Google can pre-build devices before releasing new versions of Android and other operating systems.
In an emailed statement, Google said it ignored how the FTC’s Android compatibility program, which defines device manufacturers’ and developers’ requirements to ensure compatibility with the operating system, “encourages incredible hardware and software innovation and has brought tremendous success to Korean OEMs” (original equipment). manufacturers) and developers.”
“This has provided more choice, quality and a better user experience for Korean consumers,” Google said. “KFTC’s decision, released today, ignores these benefits and will undermine the benefits that consumers enjoy. Google plans to appeal the KFTC’s decision.”
John pointed out that Samsung, the maker of the globally popular Galaxy Android phones, had a major setback in 2013 when Google forced it to cancel its plans to use a customized version of Google software in its Galaxy Gear smartwatches.
Samsung switched to a little-known operating system called Tizen but gave up on the software after grappling with a lack of apps. The company’s new smartwatches are now powered by Google’s Wear OS. LG has also been prevented from launching smart speakers based on customized Google software.
The fine announced for Google will be the ninth largest ever by the FTC. The company can pay even more.
Kim Min-jeong, another FTC official, said the amount announced by his commission is tentative, based on Google’s revenue in South Korea from 2011 to April this year. He said the final sentence, which could be announced in October or November, could be slightly higher.
“We will prohibit Google from asking device manufacturers to sign anti-fragmentation agreements regarding Play Store licensing and early access to operating systems (business contracts),” Joh said at a press conference.
Our corrective measures… will allow domestic device manufacturers to introduce ‘fork’ devices to the domestic and foreign markets, and foreign manufacturers to introduce ‘fork’ devices to the domestic market,” he said.
The FTC began investigating the case in 2016 and is conducting further investigations, including Google’s behavior in mobile apps and ad markets.
Earlier on Tuesday, the Korea Communications Commission, the country’s telecommunications regulator, said a revised telecommunications law was enacted that would ban Google and Apple from mandating developers to use in-app purchase systems.
Tech giants are facing global criticism for forcing developers to use in-app purchase systems where companies charge up to 30% commission. The companies say commissions help pay for the cost of maintaining their app marketplace.
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