South Korea fines Google $32 million for squeezing out rival

Google, reportedly tried to block Korean platform rival One Store Co.’s business development. It allegedly asked Korea’s major game companies including NCSoft Corp. and Netmarble Corp., as well as smaller firms and Chinese companies, to exclusively release their new games in Google’s Play Store, in return for Google promoting their games and providing further support abroad.

Game makers affected by Google’s action include Netmarble , Nexon and NCSOFT, as well as other smaller companies, the antitrust regulator added.

Such actions by Google began in June 2016, when One Store started in Korea and continued through April 2018, when the watchdog launched the probe, the regulator said. Those activities hindered One Store’s ability to attract new games and resulted in a drop in sales during the period, it said. Google earned around 1.8 trillion won in sales through this activity, the FTC estimated.

Google’s “actions differ from normal marketing activities,” Yu Seong Wook, director general for the commission’s Anti-Monopoly Bureau, said at a briefing as reported by Bloomberg.  “Google’s intention was to exclude One Store from the market, which it saw as a strong competitor.”

The Korean regulator has ordered Google LLC, Google Korea, Google Asia Pacific to cease 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 watchdog has also disclosed internal memos, documents and e-mails exchanged among Google employees and those between Google and game companies to show that the software giant saw the entry of One Store as a threat to its sales in Korea and proceeded with a strategy to shut out its rival in secret. 

Google was aware that the practice was anti-competitive, the FTC said. “This may cause a risk of anti-competition or government-related issues,” one memo from a meeting at Google Korea said. An internal email asked employees to delete emails promising to feature games on the top page in exchange for exclusive partnerships. 

Both Google’s Play Store and One Store generate more than 90% of sales in Korea from selling games, the FTC said. Google held about 80% to 95% market share in the mobile Android app market in Korea between 2014 and 2019, it said. 

(With inputs from agencies)