Korean Trustbuster Fines Google US$177 Million for Monopolistic Power Abuse

Korea Fair Trade Commission today ruled Google against its abuse of near-monopolistic power in the global mobile OS market, fining the world’s largest mobile OS provider US$177 million (approximately 207.4 billion Korean won)    

The Korean anti-trust watchdog declared Google guilty of violating the country’s anti-trust law by unilaterally forcing mobile phone makers in Korea and elsewhere to sign its anti-fragmentation agreement, or AFA, under which the re-architecting or redesign of the native Google Android OS is strictly banned.

The trust-buster accused Google of abusing its market dominant position to deny Korean mobile phone makers the licensing agreement to use its Play Store app store as well as prior access to native Android OS unless they sign the AFA agreement.

Th denial is meant to intrinsically prevent mobile phone makers from developing and building their mobile phone around s-called forked Android OS, as it rejects access to Android OS source code and a suite of Android OS-centric app programs.

Android Fork

The AFA is a sort of mandatory agreement designed to ban mobile phone makers from redesigning the native Android OS to customize it to their own design -UI and UX – in what’s called as forked Android OS, or Android fork -a customized version of the native Android OS.

Android OS is inherently a sort of opensource OS that is designed to let any of mobile phone makers to freely customize or redesign it to manufacture their own phone models.

Yet, Google has fundamentally denied the forking out of the source code to mobile device companies who won’t sign the AFA agreement on fears that the free customization of its native Android OS will fragment the Android OS market into so many segments of forked Android OS market, threatening to eat into its market dominance.

It took nearly 6 years for the commission to finalize its ruling.   

Ruling Goes Beyond Mobile Phones…

The ruling by the commission came 3 years after the EU fined Google US$5 billion in July 2018 ton charges that it blocked phone makers from develop mobile phone and tablet PCs that run the forked version of Android OS.

Yet, the scope and coverage are far deeper and wider, as the commission’s ruling not only goes beyond mobile phones and table PCs to cover smart watches and even smart TVs, but also stands in favor of Korean mobile device makers as well as foreign device makers, who are selling their devices in the Korean market.   

Along with the fine, the commission issued an executive order that asks Google to notify mobile phone makers concerned that it was found guilty of violating a Korean anti-trust law and then to make a correction on the AFA signed with these makers to let them to build their devices around forked Android OS.                                

The Korean anti-trust body concluded that Google’s such disguised marketing tactics has not only curbed technology innovations, but also hampered competitors from entering into the fork OS market, wholly banning Korean mobile phone makers from building their phones around customized fork OS.

Cases in point: Samsung Electronics had released Android fork OS-based smart watch Galaxy Gear 1 in 2013, but was forced by Google to forsake the development and the release of Android fork OS-based smart watch models  

According to the commission, the illegal marketing activities helped Google to represent 97.7% of the global smart mobile OS market outside of China as of 2019.