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South Korea fines Google ₩207 billion for forking up attempts at creating Android variants
LG and Samsung probably aren't smiling – and not only because that sum translates to a tolerable US$177M
South Korea's Fair Trade Commission has fined Google ₩207 billion (US$177M) for abusing its market dominance in mobile operating systems by prohibiting forks of Android.
As explained in an announcement, the Commission took exception to Google's practice of requiring companies that sought early access to information about forthcoming Android releases – essential info for handset-makers – to sign an anti-fragmentation agreement (AFA) that prohibited them from forking Android.
Without signing the AFA, handset-makers were also denied the chance to sign a Mobile Application Distribution Agreement (MADA) that allows installation of Google's Play store, Google Search, and YouTube on their devices. The Commission explains the chilling effect the two agreements imparted by revealing that LG helped Amazon.com to develop its Fire Tablet – a cheap device running an Android fork. But after prototypes had been developed, LG realised the AFA and MADA agreements were a risk to its access to Android for its own-brand devices, so stopped working on the Bezosian tablet.
Samsung's first attempt at creating a smartwatch was also stymied by Google, the Commission argued, with the result that it was forced to develope the Tizen OS – despite it lacking an ecosystem of third-party apps – rather than cutting Android to fit the application. Google didn't even have an OS for wearables at the time.
The Commission argued that Google's actions hurt innovation in many product categories and cemented Google's monopoly in mobile OSes and apps. The organisation concluded that Google needs to feel some hip pocket pain and be prevented from requiring AFAs in future.
It's not a whole lot of hip-pocket pain though: Google's 2020 revenue was US$146.9 billion and net income cracked $40 billion. South Korea's fine will scarcely sting.
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The decision looks like too little, too late, because Android is now utterly dominant in the smartphone market. Samsung is completely committed to it and, while it includes its own app store in most of the 200-million-plus devices it ships each year, it has negligible market share. Nor could Android alone save LG, which quit the mobile phone business in April 2021.
Ironically, being forced to develop Tizen worked out for Samsung, which uses it in its smart televisions and recently saw Google give up on its Wear OS and merge it with Tizen. Who knows what might have happened if Google had allowed Samsung to create a wearable-specific fork that punters actually wanted?
The answer might be found in India, where Google has allowed and assisted development of an Android fork tied to just one handset. Google and its partner in India, Reliance Jio, see that effort as a way to secure tens of millions of new Android users it can't reach with other cuts of the OS. So Android forks can clearly be helpful to Google – when they're done on Google's terms. ®