Google should play fair
Big tech fined for abusing market dominance
Korea’s antitrust watchdog fined Google 207.4 billion won ($177 million) Tuesday for abusing its dominant market position to hamper fair competition. The Korea Fair Trade Commission (KFTC) implemented the punitive steps against the U.S. tech giant for compelling smartphone manufacturers such as Samsung Electronics to install only its Android operating system (OS).
Google forced an anti-fragmentation agreement (AFA) regarding app store licenses on the device makers to prevent them from using any OS other than Android. It has not even allowed them to use modified versions of Android, in an apparent abuse of its market dominance, according to the KFTC.
KFTC Chairperson Joh Sung-wook said, “Google has engaged in an unprecedented practice that undercuts efforts toward innovation. After securing market dominance, it coerced device producers to abide by the AFA contract. The decision is meaningful as it will help restore competitive pressure in the OS and mobile app markets.”
The action against Google came as a result of the KFTC’s investigation into the global IT firm that began in 2016 amid complaints that the tech giant was forcing smartphone manufacturers to install only its own apps in return for free use of the Android OS. The KFTC’s decision is meaningful in that it applied the brakes on high-handed business practices by Google and other giant online platform businesses.
When Google unveiled its Android OS in 2008, it vowed to allow anyone to freely use and modify it. However, it shifted its business tactics in 2011 when it managed to secure market dominance, employing a non-competitive and monopolizing approache. Given this, according to the KFTC, Google’s share of the mobile OS global market continued to surge, reaching 97.7 percent in 2019 from 38 percent in 2010.
It has been a global trend to impose punitive measures on major platform businesses. The EU, for instance, fined Google $5.1 billion in 2018 for abusing its market dominance. Google said it will appeal the KFTC ruling, saying it ignored the benefits provided by Android’s compatibility with other programs.
Google said its Android system has contributed to the growth of both software and hardware innovation. It said the KFTC’s decision will undermine the development of apps for Android and violate consumers’ rights to enjoy diverse advantages. But market watchers say consumers will likely have more benefits and choices, helped by the ruling.
Google’s reaction contrasts with Kakao Corp.’s plan to withdraw from businesses earmarked for small enterprises and offer 300 billion won to help its business partners. Kakao founder Kim Beom-su pledged to fundamentally change his company’s business approach to promote social responsibility. Kakao’s move deserves acclaim.
It is proper for the authorities to take punitive steps against big tech companies, riding on the global trend toward preventing them from expanding their market dominance and abusing it. The legislation of relevant laws is necessary toward that end, and so therefore the National Assembly should speed up its deliberation of pending bills to further regulate online platform enterprises for fair competition.