Google sues S.Korean regulator to overturn $173 mn fine

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Google has filed a lawsuit against South Korea’s antitrust regulator to overturn the regulator’s decision to penalise the global technology giant for pressing smartphone makers into only using its Android mobile operating system, sources said on Wednesday.

The legal action by Google against the Korea Fair Trade Commission (KFTC) came after the KFTC decided in September last year to fine Google 207.4 billion won ($173 million) for obstructing local smartphone makers, such as Samsung Electronics and LG Electronics, from using operating systems developed by rivals.

According to the sources, the suit was filed on January 24 in an attempt to annul the KFTC’s decision to impose the fine and order Google LLC, Google Asia Pacific and Google Korea to take corrective steps to ban its practice of forcing local smartphone makers not to use operating systems developed by rivals, reports Yonhap news agency.

The KFTC said Google has hampered market competition by requiring smartphone makers to enter into an “anti-fragmentation agreement (AFA)” when they sign key contracts with Google over app store licenses and early access to OS.

Under the AFA, device makers were not permitted to install modified versions of Android OS, known as “Android forks,” on their smartphones, smartwatches and smart TV products. They also were not allowed to develop their own Android forks.

This practice has helped Google cement its market dominance in the mobile platform market and undermined innovation in the development of new operating systems for smart devices, according to the regulator.

Appealing the regulator’s decision, Google said Android’s compatibility program has spurred incredible hardware and software innovation, and brought enormous success to Korean OEMs and developers, leading to “greater choice, quality and better user experience for Korean consumers.”

The KFTC’s decision “ignores these benefits and will undermine the advantages enjoyed by consumers”, the tech giant said.

The tech giant separately applied for an injunction with the Seoul High Court on the decision, of which the trial will begin on February 25.

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