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Google Accused of App Store Abuse in South Korea
1 Jul
Summary
- Regulator alleges Google abused Android app market dominance.
- Investigation covers $9.1 billion in affected revenue.
- Google's 'Project Hug' program under scrutiny for unfair contracts.
South Korea's antitrust regulator has leveled allegations against Alphabet's Google, accusing the tech giant of abusing its dominant market position within the Android app marketplace. The Korea Fair Trade Commission's Market Surveillance Bureau announced its findings, indicating that Google's practices impacted revenue totaling 14.16 trillion won, equivalent to $9.1 billion.
Central to the investigation is Google's 'Games/Google Velocity Program,' internally known as 'Project Hug.' This initiative, active from July 2019 to March 2026, offered financial support to game developers for utilizing Google services like Cloud, Ads, and YouTube. However, a condition stipulated that games must launch on Google's app store under terms at least as favorable as competing marketplaces.
The program's structure progressively increased financial incentives for developers based on their revenue through Google Play, thereby fostering stronger loyalty to Google's platform. This strategy significantly diminished developers' motivation to distribute their games through alternative app stores, including South Korea's OneStore, effectively stifling rivals and encouraging de facto exclusive dealing with Google.
If the commission ultimately finds Google in violation, a fine of up to 6% of the affected revenue could be imposed. Google has an eight-week period to respond to the examiner's report before a final ruling is issued.
