South Korea's competition watchdog has formally accused Alphabet's Google of misusing its dominant position in the Android application marketplace to limit competition, the regulator said on Wednesday.
In an examiner's report released on Wednesday, the Korea Fair Trade Commission's Market Surveillance Bureau estimated that the conduct it identified affected 14.16 trillion won in revenue - equivalent to $9.1 billion - over the period from July 2019 through March 2026. The bureau said it will propose both corrective actions and a financial penalty targeting the company.
The report centers on a Google initiative for game developers referred to externally as the Games or Google Velocity Program and known inside the company as "Project Hug." According to the regulator, the program offered financial support to domestic and international game developers conditional on their use of a range of Google services, including Cloud, Ads and YouTube.
The bureau said the financial support carried a contractual obligation: developers accepting aid had to launch their titles on Google's app store on terms that were at least as favorable as those they granted to other competing app marketplaces. The report adds that the agreements were structured so Google increased monetary support as developers generated greater revenue through Google Play.
By tying larger payments to higher Google Play revenue, the contracts created progressively stronger incentives for developers to prioritize Google Play over rival marketplaces, the regulator concluded. The examiner's report frames this mechanism as the central basis for the allegation that Google abused its market position in the Android app ecosystem.
The Korea Fair Trade Commission will continue its review. If the commission ultimately determines that Google abused its market dominance, the company could face a fine of up to 6% of the relevant affected revenue identified by the bureau - the $9.1 billion figure noted in the report.
Reporting note - The Bureau released its findings in an examiner's report on Wednesday and signaled it will recommend both remedies and a monetary penalty. The scope of the alleged effects covers the period from July 2019 to March 2026 and centers on financial support tied to Google Play earnings for game developers.