The government of South Korea has fined Google's parent company Alphabet $177 million for anticompetitive practices.
According to The Wall Street Journal, South Korea claimed Google obstructed other companies from developing other versions of the Android operating system that would directly compete with their own. In the past, Google forced manufacturers to sign "anti-fragmentation" agreements that legally prevented them from creating or actively using forks of Android's system. Google will now need to renegotiate its existing arrangements, although the company will no doubt appeal the regulator's decision.
“Google’s anti-fragmentation agreement blocked the entry of competitors to the mobile operating system space and obstructed business innovation by device manufacturers,” Korea Fair Trade Commission (KFTC) chairperson, Joh Sung-wook, said at a briefing, according to the Wall Street Journal report.
Bloomberg reported that the measures are meant to stimulate competition by encouraging companies to develop new versions of Android.
“The Fair Trade Commission’s action was not limited to mobile devices, but corrective measures included emerging smart device-related areas such as smart watches and smart TVs,” Sung-wook said. “Therefore, we expect that new innovations will occur as some competitive pressures in this area are activated.”
According to the KFTC Samsung was among the companies affected by Google's restrictive agreements. At one point, Samsung attempted to launch a smartwatch with a customized android operating system, but was forced to switch to a different one when Google told them it would violate their anti-fragmentation agreement, according to Reuters. Amazon, LG and Alibaba are companies that have been listed as being unable to launch new products due to the restriction.
"The Korea Fair Trade Commission's decision is meaningful in a way that it provides an opportunity to restore future competitive pressure in the mobile OS and app markets," Sung-wook said.
This ruling comes at a time when Google is currently in the midst of battling a multi-state lawsuit that alleges the company practices anticompetitive behavior by forcing consumers to make payments in app so that the company takes a percentage of the payment, Techcrunch reported.
The lawsuit is bipartisan and spans 36 states. The Department of Justice and 35 states have field suits against Google for illegal behavior in maintaining its search engine monopoly.