South Korea fines Google $32M for blocking developers from releasing games on rival’s platform

South Korea’s Fair Trade Commission (KFTC) has fined Alphabet’s Google 42.1 billion won (~ $32 million) for blocking developers from releasing mobile video games on a Korean competitor platform called One Store.

On Tuesday, the KFTC said that Google allegedly required Korean video game companies to exclusively release their new games in the Play Store from June 2016 to April 2018. That means Google banned the local game makers from releasing their content on One Store in return for offering Google’s in-app exposure and further support for global expansion. 

One Store, a local peer of Google’s Play Store, was founded in June 2016 by South Korea’s three telcos — SK Telecom, KT and LG Uplus — and internet giant Naver. 

Google’s local market share in the mobile Android app market increased to approximately 90 percent to 95 percent in 2018, up from around 80 percent to 85 percent in 2016, while One Store’s market share accounted for about 5 percent to 10 percent in 2018, which fell from 15 percent to 20 percent in 2016, per the data compiled by the KFTC. 

Korea’s antitrust watchdog said the move is part of an effort to ensure fair competition in the app market by preventing the US tech giant from abusing its dominant position. 

Google Play and One Store generate more than 90 percent of domestic sales from selling games, according to the KTFC press release. Google’s activity affected the gaming companies, from large video game makers such as NCSoft, Netmarble, and Nexon to small and mid-sized game developers, the KFTC said.  

“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,” a spokesperson at Google said in an emailed statement. “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.”

In 2021, the KFTC fined Google $177 million for abusing its market dominance in the Android operating system (OS) market.

Google claims it has contributed to the growth and successful global expansion of the Korean mobile game developers that have launched their games on Play over the last decade.