Google could face up to 850 billion won fine over allegedly coercing game companies
The FTC accused the tech giant of strongarming Korea's top developers, including NCSoft and Netmarble, into staying on its Google Play Store and paying higher commissions.
A 3-D model of Google's logo is seen during the company's presentation of its investment plan for Germany outside its Berlin office on Aug. 31, 2021.REUTERS/YONHAP
Korea's antitrust regulator has opened a case against Google that could bring a fine nearing 850 billion won ($547 million) over allegations that the company coerced some of the largest game developers in the domestic market into staying loyal to its Play Store, keeping them away from rival app stores.
The Fair Trade Commission (FTC) said Wednesday it had sent Google an examiner's report, its version of a prosecutor's indictment, which accuses the company of abusing its dominant position in the app market to stifle competition. The report opens a formal review that will decide whether Google broke the law and what penalties, if any, it should face.
The commission has been investigating since November 2024, after the Citizens' Coalition for Economic Justice and other civic groups filed a complaint accusing Google of colluding with game companies.
Google began its Games Velocity Program, or GVP, in 2019 to keep developers from leaving its store to escape its high commissions on in-app purchases. Twenty-two of the top-grossing developers on Google Play, which includes NCSoft, Netmarble, Activision Blizzard King and Riot Games, signed the deal.
Under the agreement, developers promised to offer Google the same — or more favorable terms— as other competing app markets, such as by launching new games on Google first or matching perks available elsewhere. In return, Google helped cover developers' costs for using Google services, such as cloud computing and YouTube fees.
The FTC's examiners said the arrangement dulled developers' incentives to distribute through competitors such as Korea's domestic One Store and obstructed those rivals' businesses. Google further hampered competition through its efforts to shut down developers from establishing their own app stores to avoid Google's payment fees.
"We judged that Google, through its GVP contracts, in effect forced [game developers] into exclusively dealing with it," said Jeong Hee-eun, director general of the commission's Market Surveillance Bureau.
The logo of Google PlayGOOGLE
The examiners called Google's conduct a grave violation and recommended a corrective order along with a fine. The FTC estimates that Google generated around $9.2 billion in revenue through its wrongful practices. Under fair trade law, abusing market dominance can draw a penalty of up to 6 percent of the affected revenue, which would amount to roughly 849.6 billion won in Google's case. The final decision, however, rests with the full commission.
The FTC fined Google 42.1 billion won in 2023 for similar practices, when the tech giant supported game companies' overseas expansion and prime placement in its store in exchange for keeping new titles off One Store.
A fine of this size may add friction to Korea's trade with the United States, according to critics, where officials and companies have already become highly sensitive to overseas regulators taking aim at U.S. tech giants.
The FTC played down that risk.
"Antitrust litigation has already gone through the civil courts in the United States and the ruling has been finalized, so we are not particularly concerned," Jeong said.
A federal jury in California found in 2023 that Google had illegally maintained a monopoly through its Play Store, a verdict upheld on appeal last year. Central to that case were the same kind of payments at issue in Korea. Google had funneled hundreds of millions of dollars to game developers through the Games Velocity Program to keep the Play Store dominant.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
