Is FTC Unwilling to Investigate Preloaded Google Apps?

It has been found that the Korea Fair Trade Commission (KFTC) has yet to reach a conclusion on the issue related to preloaded Google apps although it resumed its investigation into the issue in December last year. According to the KFTC, Google is considered to have forced the apps to be installed by smartphone manufacturers but this act cannot be called into question based on that fact alone.

Six years ago, South Korean portal sites such as Daum and Naver reported that Google violated the Fair Trade Act by not allowing the preloaded apps to be uninstalled. The KFTC acquitted Google in 2013 but resumed its investigation last year after unfair mobile app distribution agreements between Google and smartphone manufacturers were unveiled at a parliamentary inspection of the administration.

According to the agreements, Google Search should be set as the default search engine, Google apps’ positions should be specifically designated, and essential Google apps should be preloaded all together for a manufacturer to be provided with the Android OS free of charge. In addition, manufacturers like Samsung Electronics cannot develop a new OS by using the algorithm of the Android OS.

Although Google’s coerciveness has been proven by the documents, the KFTC is still saying that the act cannot be called into question. “According to our guidelines, a conclusion on the abuse of market dominance can be made only after the coerciveness is considered to have resulted in limited market competition,” it said. This means the KFTC is reluctant to say that Google’s app preloading has led to limited market competition in the South Korean market with Naver having a higher market share than Google in the local mobile search market.

Those in the industry, in the meantime, are claiming that the KFTC’s attitude is exactly the same as four years ago and the KFTC is unwilling to look into the issue. “The commission acquitted Google in 2013 while mentioning the difficulty of proving its coerciveness and now it is procrastinating again while giving another reason,” one of them commented, adding, “Limited market competition can be immediately proven by referring to the case of YouTube, which has a share of more than 70% in the South Korean mobile video market based on its preloading.”

Google recently paid a fine of approximately eight billion won (US$7.2 million) in Russia and promised the Russian competition authorities not to force manufacturers to preload its apps. Earlier, the EU posed a penalty of three trillion won on Google for its abuse of dominance in the search market. The EU is currently accelerating its investigation into app preloading by Google.