[Exclusive] Google’s ‘Game Company Abuse’... Fair Trade Commission to Begin Sanctions in April

The Korea Fair Trade Commission (KFTC) will decide the level of sanctions in early April regarding allegations that Google obstructed domestic game companies from launching their services on competing app markets. This comes about five years after the investigation into Google, which faced accusations of ‘game company bullying.’ The KFTC is strengthening its efforts to curb the abuse of monopoly power by global big tech companies.

According to industry sources on the 27th, the KFTC plans to hold a plenary meeting in early April to determine the sanctions against Google for violations of the Monopoly Regulation and Fair Trade Act (Fair Trade Act) and other related charges.

Since April 2018, the KFTC has been investigating allegations that Google forced domestic game companies such as Nexon and NCSoft to release their apps exclusively on its own app market, the Play Store. At that time, game content apps like NCSoft’s Lineage M were only available on Google Play Store and Apple’s App Store, but not on the domestic app market One Store, raising suspicions of Google’s unfair practices.

In January 2021, after completing the investigation, the KFTC concluded that Google had abused its market dominance and sent a review report (similar to a prosecutor’s indictment) recommending sanctions such as fines. It was reported that Google, which holds dominant power in the app market, created a competitive restriction effect by providing benefits to game companies using its app market ‘Google Play Store’ and excluding other competing app markets.

However, in June 2021, Google filed an administrative lawsuit against the KFTC (requesting cancellation of refusal to allow inspection and copying), effectively halting the sanction process. At that time, Google requested that up to five people be allowed to enter the ‘data room’ (a restricted document inspection room) to review materials attached to the review report.

The data room is a system where only external lawyers representing the investigated company can enter a restricted document inspection room equipped with CCTV to review key information such as trade secrets of other companies used in the review report. Google argued that there was no regulatory basis for the KFTC to limit the number of inspectors to one person and filed a lawsuit demanding an expansion of the number of inspectors.

However, after Google lost the case at the Seoul High Court last year, the KFTC’s sanction process was able to resume. Following the High Court’s ruling that the number of people allowed in the data room remains one, Google completed the procedure to review the materials attached to the review report according to KFTC regulations. The KFTC stated that it has completed all necessary procedures to initiate the sanction process and has proceeded with the plenary meeting submission process. Regardless of whether Google appeals to the Supreme Court or the outcome of such an appeal, the KFTC believes it is difficult to delay the sanction process any further as all necessary administrative procedures for sanctions have already been completed.

Earlier, Chairman Han Ki-jung repeatedly announced plans to initiate the sanction process against Google for restricting competition in the app market at year-end press briefings last year. Chairman Han said, “The KFTC sanctioned Google in 2021 for obstructing the launch of competing OSs and is carefully monitoring areas such as app markets. We will soon begin the review process regarding the case where Google obstructed game companies’ transactions with competing app markets.” The KFTC also plans to revise related systems and policies to establish a fair trading order in the app market, viewing the establishment of fair trade in infrastructure-type platform sectors as important.

Meanwhile, the KFTC has recently started an on-site investigation into Google regarding allegations that it tied YouTube Music to the YouTube Premium subscription plan. Google offers YouTube Music Premium for free to subscribers of YouTube Premium, and the KFTC views this practice as a possible ‘tying sale’ that hinders competition in the music streaming market, including services like Melon and Genie Music.

[Image source=Yonhap News]