Google Fines Alphabet for Using Its Power in Play Store

147
3
Google Fines Alphabet for Using Its Power in Play Store

Bloomberg fined Alphabet Inc. for using its clout in the mobile app market to squeeze out a rival, as scrutiny intensifies on the software giant's bid to expand its global reach.

China may not need Western Technology much longer than that.

In an e-mailed statement Tuesday, Korea s Fair Trade Commission said Google tried to block Korean platform rival One Store Co.'s business development. Google asked Korea's major game companies, including NCSoft Corp. and Netmarble Corp., to exclusively release their new games in Google's Play Store, in exchange for Google promoting their games and providing further support abroad.

The FTC said that Google has a game on its top pages that was important for Korean game companies success in expanding overseas, where many of their games visibility is low.

Such actions by Google began in June 2016 when One Store began in Korea and continued through April 2018 when the watchdog launched the probe, the regulators said. It said that those activities inhibited One Store's ability to attract new games and resulted in a drop in sales during the period. The FTC estimated that Google earned around 1.8 trillion won in sales through this activity.

Yu Seong Wook, director general of the Commission's Anti-Monopoly Bureau, said at a briefing that Google's actions differ from normal marketing activities. Google wanted to exclude One Store from the market, which it saw as a strong competitor. Google rebuttal to accusations of anti-competitive behavior has been to say that it is an open platform and doesn't prevent other app stores from competing. The company points users to apps from its Play Store because that is where it can provide the best security and oversight, it says.

Google, Google Korea, and Google Asia Pacific have been ordered by the regulators to stop offering support to mobile game companies in exchange for promises of exclusivity. The three entities were asked to launch an internal monitoring system and report to the FTC for follow-ups.

The Korean watchdog found internal memos, documents, and e-mails exchanged between Google and game companies to show that the software giant saw One Store as a threat to its sales in Korea and proceeded with a strategy to shut out its rival in secret.

The FTC said that Google was aware that the practice was anti-competitive. One memo from a meeting at Google Korea said this could cause a risk of anti-competition or government related issues. More than 90% of sales in Korea come from Google's Play Store and One Store, according to the FTC. Google held 80% to 95% of the market share in Korea's mobile app market between 2014 and 2019, it said.

One Store is a local platform created by Korea's three telecom companies - SK Telecom Co. KT Corp. and LG Uplus Corp., and the internet firm Naver Corp. One Store is preparing an initial public offering and is seeking a valuation of $833 million, according to Hyun-Joon Hwang, analyst at DB Financial Investment.

AI isn't moving fast enough to break things.