In Korea, the police of competition condemns Google to a fine of 30 million euros
Posted Apr 11, 2023, 11:55 AMUpdated on Apr 11, 2023 at 12:18 PM After more…
Posted Apr 11, 2023, 11:55 AMUpdated on Apr 11, 2023 at 12:18 PM
After more than five years of investigation and the discovery of several compromising e-mails, South Korea will again sanction Google for abuse of dominant position on the local market. The American group and its various Korean subsidiaries will have to pay a total fine of 42.1 billion won, or 30 million euros, the competition policeman announced on Tuesday.
The authority believes that Google has illegally maneuvered to ensure the exclusive distribution of certain video games. This is the second sanction against Google, after that of $177 million imposed in 2021 in an investigation into the imposition of its Android operating system on Korean smartphone manufacturers.
This time around, investigators say, Google executives pressured, at least between June 2016 and April 2018, major South Korean mobile game publishers as well as a few Chinese studios to launch their new games. exclusively on Google Play, the group’s application distribution platform, and that they refuse to distribute their programs on One Store, a competing Korean platform that had just launched.
At the time, the three major operators operating in the peninsula (SK Telecom, KT Corp and LG Uplus) and the Internet giant Naver had agreed to bring together their application stores on the same One Store platform, with the hope of taking some market share from Google Play. One Store only offering apps for users of Android devices in the country.
The FTC uncovered emails proving that Google knowingly pushed game publishers, such as NCSoft and Netmarble, to shun One Store in order to prevent its emergence as an alternative solution. In exchange for an exclusive release on Google Play, the subsidiaries of the American group undertook to better promote new games in the country but also internationally.
Google’s actions “did not correspond to normal marketing activities,” said Yu Seong-wook, director general of the Commission’s anti-monopoly office, on Tuesday. “Google’s intention was to exclude One Store, which it considered a strong competitor, from the market. […] Google has thereby impeded innovation and consumer benefits in the app market and mobile gaming industry,” the executive insisted.
According to data compiled by the FTC, Google succeeded, through its maneuvers in the late 2010s, in curbing the rise of the local platform. At the end of its influence campaign in 2018, its Google Play store held between 90% and 95% of the Korean market for Android app spending. One Store only captured 5% or 10% of the local market. Having since boosted its game offer and lowered the amount of commissions it imposes on publishers, the platform has managed to regain some market share. It is even considering an IPO to finance its launch abroad.
In a press release, Google denied any illegal practice and assured that it fully respected the rules of the South Korean market. However, he may soon have to defend himself in another file monitored by the Seoul authorities. Last year, the Korea Communications Commission (KCC) announced that it would take an interest in in-app payment systems and particularly to the practices of Apple and Google.