The Korea Fair Trade Commission fined Alphabet Inc’s Google 207 billion won ($177 million) for blocking customized versions of its Android operating system alleging that the American tech giant was using its dominant market position in the mobile operating industry to hold back competition, by blocking smartphone makers, like Samsung, from using operating systems developed by rivals.
Following the antitrust fine which Google plans to appeal, the company has come out to say that its presence in the country provides economic benefits worth up to 12 trillion won, the equivalent of $10.16 billion for its users.
According to the Korean Fair Trade Commission, the fine of $177 million dollars could become the ninth-biggest fine it has ever imposed against a tech company. The fine is also the second challenge that Google has been faced with regarding the country in less than a month.
Although Google did not provide how it arrived at its conclusion, it said the following things during an online event. The tech giant claims that on a yearly basis, 5.1 trillion won worth of benefits are provided to South Koreans through its PlayStore, its search engine service provides 4.2 trillion won for South Korean citizens and its productivity apps provide 2.5 trillion won.
According to Susan Wojcicki – CEO of YouTube, YouTube contributed over 1.5 trillion won to the country’s GDP in 2020 and provided over 86,000 jobs.
During the online event, the company’s Country Director (for Korea) said that “We will continue to do our best to support our partners to grow and advance into the world and to positively contribute to the South Korean economy”.
About the antitrust fine, the Korea Fair Trade Commission said that Google repressed competition by making device producers abide by an “anti-fragmentation agreement (AFA)” when signing key contracts with it regarding app store licenses. Under the anti-fragmentation agreement, phone makers were prevented from adopting modified versions of the Android operating system (known as ‘Android forks’) on their devices.
Under the latest ruling, Google is banned from forcing device makers to sign anti-fragmentation agreement contracts, thus allowing manufacturers to adopt modified versions of Android OS on their devices.