Google dinged with $32M fine in South Korea for blocking mobile games on rival app store

Article by Gadjo Sevilla | Apr 12, 2023

The news: Google was fined 42.1 billion won ($32 million) by South Korea’s Fair Trade Commission (KFTC) for blocking mobile video game developers from a rival Korean mobile app platform called One Store, per TechCrunch.

South Korea is Google Play’s third-biggest market behind the US and Japan.
One Store, which was founded in June 2016, belongs to a conglomerate of South Korea’s three telecom providers—SK Telecom, KT, and LG Uplus—and internet provider Naver.

More than a slap on the wrist: The fine is a result of Google’s alleged efforts to require Korean video game companies to exclusively release new games on the Play Store from June 2016 to April 2018.

Regulators say Google blocked local game developers from releasing their content on the competing One Store in exchange for in-app exposure and promises of support for global expansion.
Google grew its South Korean mobile market share from 90% to 95% in 2018.
Meanwhile, One Store’s market share accounted for about 5% to 10% in the same time period, falling from 15% to 20% in 2016.

Repeat offender: This isn’t the first time Google has faced regulatory scrutiny in South Korea.

The KFTC fined Google 207.4 billion won ($177 million) in 2021 for abusing its dominant position in the Android market by restricting device makers from using rival operating systems.
This time around, the KFTC said Google’s activity derailed larger mobile video game makers such as NCSoft, Netmarble, and Nexon, as well as small and mid-size companies.

Google’s response: “Google makes substantial investments in the success of developers, and we respectfully disagree with the KFTC’s conclusions. We believe that there has been no violation of the law,” a spokesperson at Google said.

Our take: Google—which is facing various antitrust charges outside the US, including $160 million fine in India and $155 million in the UK—is treading on dangerous ground and could incite intensifying regulatory scrutiny at a time when it’s scrambling for economic recovery and cutting costs.