South Korea’s Fair Trade Commission announced its intention Tuesday to file a lawsuit against Google for allegedly preventing smartphone creators such as Samsung and LG from using other operating systems. If it wins, Google will be fined $177 million.
Google has said it plans to challenge the fine, accusing South Korean authorities of ignoring the benefits of the contracts on the consumers and partners. Some of these benefits include “incredible hardware and software innovation,” which “brought enormous success to Korean OEMs (original equipment manufacturers) and developers,” a Google spokesperson said in an email to the Washington Examiner.
“This in turn has led to greater choice, quality and a better user experience for Korean consumers,” the spokesperson continued. “KFTC’s decision released today ignores these benefits, and will undermine the advantages enjoyed by consumers. Google intends to appeal the KFTC’s decision.”
BIPARTISAN LEGISLATION WOULD AFFECT GOOGLE AND APPLE APP STORE DOMINANCE
South Korea is known for scrutinizing how foreign technology companies behave in the market. Because both Google’s and Apple’s products dominate in the field of technology, they have been South Korea’s primary focus. Authorities have promised to prevent both companies from abusing their positions within the country’s marketplace.
Google requires device manufacturers to sign anti-fragmentation agreements that prohibit the companies from installing modified versions of Google’s operating system in smartphones. Joh Sung-wook, chairwoman of South Korea’s FTC, said it will ban Google from requiring the manufacturers to sign the agreement.
A revised telecommunications law recently came into effect in South Korea that prohibits companies, including Google and Apple, from requiring smartphone users to pay with their in-app purchasing systems. A Google spokesperson told the Washington Examiner that it intends to comply with the Korean law.
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Apple recently faced a court case regarding in-app purchasing when it removed the popular game company Epic Games from its servers because the company allowed users to buy in-app coins directly from Epic, rather than going through Apple. The judge ruled that Apple could not prohibit video game companies from directing users to other forms of payment that would circumvent Apple’s 30% fee.
If South Korea successfully fines Google, it would be the ninth-largest fine the FTC has imposed. However, it is possible Google could be forced to pay more, and a finalized number could be announced as early as October.
