The move is significant given the leading position of Korean firms Samsung Electronics and LG Electronics in the mobile handset, tablets and wearables markets.
The Korea Fair Trade Commission (KFTC) said Tuesday that Google had abused and protected its market dominance by making device producers sign up for “anti-fragmentation agreements.” The KFTC said that companies had not been able to launch new products on schedule due to Google’s “obstruction.”
The fine is the ninth largest that the KFTC has ever imposed. Its ruling also specifically bans Google from compelling manufacturers to sign AFAs.
“The Fair Trade Commission’s action was not limited to mobile devices, but corrective measures included emerging smart device-related areas such as smartwatches and smart TVs. Therefore, we expect that new innovations will occur as some competitive pressures in this area are activated,” said KFTC chairman Joh Sung-wook in a briefing.
Google, which insists that Android has helped companies to innovate, has indicated that it will appeal against the decision. “The KFTC’s decision released today ignores these benefits, and will undermine the advantages enjoyed by consumers,” it said in a statement.
But, in another move, Tuesday was also the first day of effect of legislation passed in August that has been called the “Anti-Google Law.” The law bans app store operators from requiring software developers to use their payment systems, something which limited developers from charging commission on in-app purchases. They must now open their stores to outside payment systems.
Bloomberg reports that the KFTC “is investigating three other cases related to Google and competition restrictions in its Google Play Store app market, in-app purchases and the advertisement market.”