Google Fined $32 Million for Squeezing its Local Rival in South Korea

Google, Alphabet Inc.'s mobile app division, has been fined 42.1 billion won ($32 million) for abusing its clout in the Korean market to squeeze out one of its local rivals, the latest sign that scrutiny on the US technology company is intensifying as it attempts to expand internationally.

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The Korea Fair Trade Commission stated in a statement sent by e-mail on Tuesday that Google was trying to hinder the growth of Korean platform rival One Store Co. There have been allegations that Google offered some Korean video game companies, such as NCSoft Corp. and Netmarble Corp., as well as smaller companies and Chinese companies, exclusive rights to release their new games only on Google's Play Store in exchange for Google's promotion and support abroad of these games.

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In a report by the Federal Trade Commission, it was pointed out that Google's presence on top pages has played a key role in Korean game companies' expansion overseas, where many of their games lack visibility due to low search engine rankings.

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Developers have been denied the opportunity to receive any benefits from Google - which controls roughly three-quarters of the Korean mobile app market - when they choose to make their apps available only on Google Play.

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In a written statement, a Google spokesperson said there has been no infringement of the law, noting that the platform is an open one, meaning developers have full control over how their apps are distributed. "Google makes substantial investments in the success of developers, and we respectfully disagree with the conclusions of the KFTC."

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The regulator stated in a press release that Google began making conditional offers in June 2016, when One Store began operating in Korea, and continued to do so through April 2018. The FTC said that the activity was detrimental to One Store's ability to attract new games and resulted in a drop in sales while increasing Google's revenue by about 1.8 trillion won as a result.

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The actions taken by Google are different from normal marketing activities, Yu Seong Wook, director general for the commission's Anti-Monopoly Bureau, said at a press briefing. He added that Google was trying to eliminate One Store from the market, which it saw as a significant competitor in the market.

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The search giant, which is facing an upsurge of accusations of anticompetitive practices all over the world, has said that it does not prevent its competitors from competing on its platform, unlike Apple Inc. As per the company, the best security and oversight can be provided by its Play Store, which is where it directs users to download apps, it claims.

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Recently, Google has been facing a number of antitrust charges outside the US, including fines and litigation in India and the United Kingdom.