Seoul: Seoul's antitrust watchdog announced it has initiated a probe into U.S.-based Google LLC, along with its Singaporean and South Korean offices, over allegations of breaching fair trade laws related to game developers on its app marketplace. The Fair Trade Commission (FTC) reported that Google's dominance in the Android marketplace has resulted in sales amounting to US$9.21 billion. According to Yonhap News Agency, the watchdog has the authority to impose a fine of up to 6 percent of this amount, potentially reaching 849.6 billion won ($547.3 million), following its review.
The FTC's investigation centers on Google's Games Velocity Program (GVP) agreements with major game developers, both domestically and internationally. These agreements allegedly aimed to prevent developers from leaving its app marketplace by subsidizing their costs for using Google services, such as Google Cloud and advertising, in exchange for favorable treatment over rival marketplaces.
The FTC examiners concluded that these agreements significantly hindered game developers from accessing competing app marketplaces, thereby disrupting business activities on other platforms. Google's app store, Google Play, has reportedly maintained a market share exceeding 80 percent in South Korea's Android app market. The examiners also determined that the GVP agreements effectively forced game developers into exclusive dealings with Google.
An FTC official stated that while developers received support from Google, rejecting such support would have been virtually impossible due to Google's market dominance. The official clarified that although developers received financial assistance, they did not breach the fair trade act.
Google has been given eight weeks to submit written responses to the examiners' report. The company asserted that it has not violated any laws and intends to clarify its position during the FTC's deliberations. A Google representative stated that Google Play has been competing fairly with other app marketplaces and providing various benefits to developers and users in South Korea. The company emphasized its cooperation with the FTC's investigation and its commitment to demonstrating compliance with the law.
In a related case in 2023, the FTC fined Google 42.1 billion won for offering preferential placement to developers on Google Play on the condition that they did not release games on One Store, a competing app marketplace. South Korean law allows for increased fines if a company repeats an offense within five years, but the FTC noted that the maximum fine remains 849.6 billion won, even considering potential increases.