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Google hit with $177 million fine for abusing mobile market dominance

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Google becomes the next big company that has found itself on the wrong side of the law in a matter of weeks. Just last month, Whatsapp was fined Ksh 29 billion by an Irish Court for breaching data protection rules.

On this ruling, however, Google was found guilty by South Korea’s competition regulator who announced it will fine the company $176.7m, equivalent to Kshs 19.4 billion, for allegedly using its dominant market position in the mobile operating system space to stifle competition.

Google’s Android operating system holds a massive share of the smartphone market, especially on entry-level devices, ahead of Apple’s iOS platform.

The Korea Fair Trade Commission alleges Google used its market position to block smartphone makers like Xiaomi and Samsung from using operating systems developed by rivals.

This is not the first time Google has been accused of using this underhanded tactic, as we covered Epic’s lawsuit against Google which claimed the tech giant paid phone manufacturers to ditch third-party app stores, ensuring a large majority of people will be forced to use the Google Play Store.

According to Yonhap News, the regulator, whose decision was published in Korean, said the tech giant required smartphone makers to agree to an “anti-fragmentation agreement (AFA)” when signing key contracts with Google over app store licences and early access to the operating system.

Under an AFA, device makers are not permitted to install modified versions of Android OS, known as “Android forks” on their products. They are also 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 OS for smart devices, reported the Korea Fair Trade Commission.

As expected, a Google spokesperson countered that Google’s measures have instead encouraged hardware and software innovation and brought success to phone makers and developers.

“The KFTC’s decision released today ignores these benefits, and will undermine the advantages enjoyed by consumers. Google intends to appeal the KFTC’s decision,” the spokesperson told CNBC in a statement.

The regulator has ordered Google to ban its practise of forcing Android manufacturers to sign an AFA and to make corrections on details about the AFA before reporting them to the commission.

“We expect the latest measures will help set the stage for competition to revive in the mobile OS and app markets. This is also expected to help the launch of innovative goods and services in smart device markets,” the KFTC concluded.

Will the fine have an effect?

The fine, which is admittedly massive in the Kenyan market, is, unfortunately, nothing more than a slap on the wrist to the tech giant whose revenue for a single year is always in the trillions of dollars range.

Still, the decision by South Korea will hopefully encourage other countries to be sterner in regulating these massive tech companies like Google and Facebook to ensure the consumer gets the most satisfactory service without man-made roadblocks that only serves the interests of a few.






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