High Court slaps Google with $169 million antitrust fine

Google Korea's office in Gangnam Disrict, southern Seoul [NEWS1]

The Seoul High Court sided with the Korea’s antitrust regulator on Wednesday, slapping Google with a fine of 224.9 billion won ($168.6 million) for prohibiting smartphone manufacturers from utilizing another mobile operating system (OS) apart from Android.

Korea's Fair Trade Commission (FTC) had initially fined Google in September 2021, determining that the operator had abused its dominant market position by requiring manufacturers, including Samsung Electronics, to sign anti-fragmentation agreements (AFA) preventing them from customizing the Android operating system in order to access the Google Play Store and other benefits. The regulator felt that restricting such forks to the OS would effectively stymie viable competition to Android.

Google filed a suit against the FTC to nullify corrective orders and fines imposed by the agency, but higher court ruled against the plaintiff.

“Google imposed an obligation on phone manufacturers to prohibit fragmentation and to prevent competitors from incorporating other OS's or releasing new devices equipped with OS's developed by its own companies,” the court said. “This hindered innovational activities related to the research and development of new smart devices by the manufacturers.”

“Korean companies such as Samsung Electronics and LG Electronics, as well as global companies like Amazon and Alibaba, aimed to launch smart devices with Android OS. However, such releases were either overturned or hindered due to Google’s insistence on AFA compliance.”

Google's AFA policy has hindered the development and release of new gadgets in Korea for more than a decade.

Samsung launched a smartwatch in 2014 running a forked version of Android, which Google considered an AFA violation.

LG, in 2018, attempted to release a smart speaker operating a modified OS, but the launch was canceled after Google found it to be an AFA violation.

Amazon has also been unsuccessful in efforts to install its own operating system on smart TVs manufactured by Samsung and LG.

Google said Wednesday, after the court ruling, that it is “disappointed” with the result and that its Android compatibility program has brought numerous benefits to local smartphone manufacturers and app developers.

“Google is disappointed that the court has dismissed Google’s claims, despite the fact that Google’s compatibility program has contributed to the global expansion and success of Korean device manufacturers and app developers, and has brought considerable benefits to Korean consumers,” Google said. “Google plans to carefully review the court’s decision before determining our next steps.”

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]