South Korea Fair Trade Commission (KFTC) has fined Alphabet’s Google 42.1 billion won (~$32 million) for stopping developers from releasing mobile video games on a competing Korean platform called A store.
On Tuesday, the KFTC said that Google allegedly required Korean video game companies to exclusively release their new games on the Play Store from June 2016 to April 2018. That means Google banned local game creators from releasing their content on One. Store in exchange for offering Google App Exposure and further support for global expansion.
One Store, a local peer of Google’s Play Store, was founded in June 2016 by three South Korean telecommunications companies (SK Telecom, KT, and LG Uplus) and Internet giant Naver.
Google’s local market share in the Android mobile app market increased to approximately 90-95% in 2018, up from 80-85% in 2016, while One Store’s market share accounted for between 5% and 10% in 2018, which decreased from 15% to 20% in 2016, according to data compiled by the KFTC.
Korea’s antitrust watchdog said the move is part of an effort to ensure fair competition in the app market by preventing the US tech giant from abusing its dominant position.
Google Play and the One Store generate more than 90% of domestic sales from the sale of games, according to the KTFC press release. Google’s activity affected game companies, from big video game makers like NCSoft, Netmarble and Nexon to small and medium-sized game developers, the KFTC said.
“We have diligently cooperated with the KFTC’s investigative and deliberative process for the past five years and believe there have been no violations of the law,” a Google spokesperson said in an emailed statement. “Google makes substantial investments in developer success, and we respectfully disagree with the KFTC’s findings. We will carefully review the final written decision once it is shared with us to assess the next course of action.”
In 2021, the KFTC fined Google $177 million for abusing its dominant position in the Android operating system (OS) market.
Google claims that it has contributed to the growth and successful global expansion of Korean mobile game developers who have launched their games on Play over the past decade.
