South Korea’s Fair Trade Commission (KFTC) has imposed a fine of 42.1 billion won, equivalent to $32 million, on Alphabet’s Google for allegedly blocking developers from releasing mobile video games on a Korean competitor platform called One Store. According to the KFTC, Google reportedly forced Korean video game companies to exclusively release their new games in the Play Store from June 2016 to April 2018, thereby preventing local game makers from releasing their content on One Store. In return, Google offered in-app exposure and further support for global expansion. One Store was founded in June 2016 by South Korea’s three telecom companies, SK Telecom, KT, and LG Uplus, along with internet giant Naver.
Google’s market share in the mobile Android app market surged to nearly 90% to 95% in 2018, up from approximately 80% to 85% in 2016, while One Store’s market share accounted for about 5% to 10% in 2018, falling from 15% to 20% in 2016, according to data compiled by the KFTC. The watchdog aims to ensure fair competition in the app market and prevent Google from abusing its dominant position. Google Play and One Store account for over 90% of domestic sales from selling games, according to the KTFC press release. The KFTC said that Google’s activity impacted large video game makers such as NCSoft, Netmarble, and Nexon, as well as small and mid-sized game developers.
Google has cooperated diligently with the KFTC’s investigation and deliberation process over the past five years and believes that it has not violated the law, a Google spokesperson said. The spokesperson added that Google makes substantial investments in the success of developers and disagrees with the KFTC’s conclusions. The company plans to carefully review the final written decision and evaluate the next course of action.
