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South Korea fines Google $32M for using market power to stymie rival app store

Forced developers to sign exclusivity agreements in return for promises of going global

South Korea’s Fair Trade Commission today slapped Google with a ₩42.1 billion ($32 million, £26 million) fine for attacking a rival app store with anticompetitive practices.

The fine concerned a local app store named OneStore that launched in 2016. As OneStore came to market, Google started to tell developers that it would not feature their products in its own Play Store if they also used OneStore. The search and text ads giant also told developers it could help them enter markets outside Korea if they signed up for exclusive use of Play in South Korea.

OneStore merged the app stores of South Korea’s top three telcos and Naver, an internet search company that is the nation’s number one online destination. The four entities behind OneStore therefore had plenty of loyal and engaged customers to target, and the combined muscle to make the business successful.

But as the Commission’s announcement of its fine spells out, without apps users wanted – especially games - OneStore struggled.

A Google spokesperson told The Register: "We compete vigorously with other app markets, and are proud of the benefits we deliver to developers including the gaming industry and everyday users through Google Play.

"We have cooperated diligently with the KFTC’s investigation and deliberation process for the past five years and believe that there has been no violation of the law."

The spokesperson continued: "Google makes substantial investments in the success of developers, and we respectfully disagree with the KFTC's conclusions. We will carefully review the final written decision once it's shared with us to evaluate the next course of action.”

The fine is Google's third recent run-in with South Korean competition regulators.

In 2021, Google’s outpost was fined ₩207 billion ($177 million) for abusing its market dominance in mobile operating systems by prohibiting forks of Android.

In 2022, Google also struck trouble in the South for failing to strictly comply with laws requiring third party payment processors to offer their services in the Play store.

Also in 2022, the serial monopolist was also slugged with a $50 million fine for privacy violations in South Korea nation (Meta copped a $22 million penalty as a result of the same action).

OneStore is now South Korea’s number two app store, scale that in 2021 saw it secure investment from Microsoft and Deutsche Telekom to - ironically - help it target international markets in the hope it would create more competition for Google. ®

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