The Fair Trade Commission (FTC) of South Korea came to a conclusion that Google Korea’s preloaded apps and subsidies for search ads do not constitute any abuse of market dominance. This is because Naver enjoyed a market share of more than 70%, Daum Kakao enjoyed a market share of 15% to 19% and that of Google was merely 2% to 8% during the period of 2008 to March this year, when Google was involved in preloading of apps in the South Korean market.
The FTC also made a decision contrary to that of the EU with regard to Google’s search ad subsidies provided for mobile carriers. According to the FTC, the amount of the subsidies was very small in correlation with the company’s market share and, as such, the subsidies did not restrict competition in the market. The commission is planning to keep monitoring the possibility of Google Korea’s market dominance abuse, but restrictions are rather unlikely with its preloaded apps acquitted.
Google’s Android OS supply contracts with smartphone manufacturers such as Samsung Electronics stipulate that Google’s Android applications cannot be loaded in the case of downloading of a mutant application. This means Samsung Electronics has to accept unremovable preloaded apps on its Android smartphones. This is for Google to increase its profits based on paid app sale and search ads by making consumers familiar with those apps.
Google explained that the apps are to prevent the inconvenience of consumers that could arise when the mutant application is incompatible, but this act was criticized as being contradictory to its own open platform policy. A large number of people are still claiming that such preloaded apps negatively affect the domestic app ecosystem as South Korean app developers are driven to resort to games, SNS and the like due to the dominant market share of Google in the segments including video streaming, map information, etc.