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S. Korea issues fine on Google for abusing market dominance

South Korea has issued a fine of 207.4 billion won ($177 million) on US-based tech giant Alphabet Inc.’s Google, on grounds of indulging in practices that would hamper the development of competitors to its Android OS, by abusing its smartphone market dominance. This is the latest in the string of suits, fines and campaigns that have been launched against the industry biggie’s hold over the smartphone market.

Prevented Companies From Creating Modified Android

South Korean regulators have slammed Google of relying on its market stronghold and bargaining power, to block out competition. The Korea Fair Trade Commissiom has claimed that Google has put in place multiple anti-fragmentation agreements (AFA) with Korean tech biggies like LG Electronics Co. and Samsung Electronics Co., in order to prevent gadget companies from developing or incorporating modified versions of the Android OS in their devices. The country’s authorities have barred the company from forcing device-makers into signing such contracts and has directed it to modify any existing contracts.

This comes even after the Asian country had just last month become the first country to approve a bill which would force Google and its contemporary Apple to allow the apps in their app stores to make use of third-party payment systems while carrying out any transactions. This move could give impetus to many other countries bringing out similar laws.

According to the Korea Communications Commission, the law came into effect on September 14. The fine that has been levied this time around is one of the highest the country has ever issued regarding a firm’s abuse of market dominance. The only fine that exceeds the one that Google has been slammed with, happens to be Qualcomm’s mobile chipsets.

Forgetting The Benefits

Korea fine Google

Image Credits: Getty Images

In response to the charges, Google has said that its Android has led to increased innovation across countries, and that South Korea is no exception to this trend. The firm says that the ruling by the watchdog ignores all the benefits that the OS has brought forth, and has the potential to “undermine” the benefits to consumers.

Meanwhile, Tom Kang, the research director at Counterpoint, has said that the move, which he believes to be a major win, comes “after years of sitting on the fence.” He has added that now, the regulator will be able to monitor Google’s actions, and penalize it for any wrongdoing, something that could potentially be extended to other tech and internet giants too.

 

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