The Korea Fair Trade Commission (KFTC) has levied a fine of $177 million against Google, accusing the tech giant of abusing its dominant position in the market by blocking phone manufacturers from the customised versions of its Android operating system.
The KFTC made it clear that the anti-fragmentation agreement (AFA) that Google makes manufacturers sign in exchange for using its Android operating system (OS) is an abuse of its power which restricts competition in the mobile OS market.
The agreement prevents phone manufacturers, including Korean companies Samsung and LG, from creating and installing their own versions of the Android OS, known as Android forks, on their devices.
According to Reuters, Google revealed in a statement that it intends to appeal the fine, as it overlooks the benefits that its Android OS offers.
“The KFTC’s decision released today ignores these benefits, and will undermine the advantages enjoyed by consumers. Google intends to appeal the KFTC’s decision”, the statement said.
In addition to the fine, the KFTC has also banned the company from forcing manufacturers to sign AFAs from now on, and to modify existing ones.
“The Korea Fair Trade Commission’s decision is meaningful in a way that it provides an opportunity to restore future competitive pressure in the mobile OS and app market markets,” KFTC Chairperson Joh Sung-wook said.
The KFTC revealed that this is the ninth-biggest fine it has ever imposed.
The fine comes on the same day that an amendment to South Korea’s Telecommunications Business Act – popularly dubbed the “anti-Google law” – came into effect.
The bill was passed back in August and it bans app store operators such as Google from requiring software developers to use their payment systems. This requirement has effectively stopped developers from charging commission on in-app purchases.