Korea's probe into Google should promote market choice, while upholding due process

The greatest threat to competition often settles in quietly until rivals no longer see a point in competing. That is why South Korea's latest antitrust case against Google deserves attention beyond the size of any potential fine.

At issue is whether digital markets reward innovation or gradually become self-reinforcing systems where dominance feeds on itself.

The Korea Fair Trade Commission said Wednesday that it has launched formal proceedings against Google over its Games Velocity Program, internally known as Project Hug. Investigators allege that, over nearly seven years, Google encouraged 22 leading domestic and foreign game developers to favor its app marketplace, Google Play, by offering commercial credits across its cloud, advertising and video businesses.

The affected revenue exceeds 14 trillion won ($9 billion), exposing the company to a possible fine of up to 849.6 billion won if the commission ultimately rules against it. Google denies any wrongdoing and has eight weeks to present its defense.

The case extends well beyond another dispute over app store commissions. Businesses routinely offer incentives to attract customers. The FTC’s concern is whether those incentives became exclusionary once they were coupled with Google's commanding position, which accounts for more than 80 percent of Korea's Android app market.

The trade watchdog’s theory of harm rests on how those incentives were structured rather than on the incentives themselves. Developers that generated a larger share of their business through Google Play reportedly became eligible for greater commercial benefits.

For companies already dependent on the platform, declining such arrangements may have been commercially unrealistic. What appeared to be voluntary cooperation may therefore have evolved into a system that steadily eroded the appeal of rival app marketplaces.

The broader significance lies in market structure rather than corporate nationality. Critics argue that another investigation into a major US technology company could inject unnecessary friction into wider bilateral economic relations.

Yet regulators cannot allow diplomatic calculations to determine which companies face scrutiny. The commission notes that similar conduct has already been examined through antitrust litigation in the United States, while European authorities continue pursuing comparable cases involving Google's treatment of competing online services.

A Swedish court's recent ruling ordering Google to compensate Klarna subsidiary PriceRunner over search-related competition claims illustrates that tougher oversight of dominant digital platforms has become an international trend rather than a uniquely Korean initiative.

The more difficult question involves what follows any financial penalty. Even a record fine may become little more than another operating expense if the underlying competitive landscape remains unchanged. Effective enforcement ultimately depends on whether it removes incentives to repeat the behavior.

The objective should therefore be ensuring conditions under which alternative app marketplaces can genuinely compete. That requires transparent rules governing platform conduct, vigilant oversight of exclusionary contracting practices and confidence among developers that multi-store distribution carries no penalty.

Google deserves full procedural fairness throughout the FTC’s deliberations. The allegations remain unproven until the evidence is tested, and the company is entitled to every opportunity to respond.

That principle, however, cuts both ways. Regulators should not hesitate to enforce competition law simply because the company involved happens to be one of the world's largest technology firms.

Healthy markets do not depend on the restraint of dominant companies. They depend on rules that prevent commercial success from hardening into permanent advantage. If Korea's regulators remain guided by that principle, this case will be remembered not for the size of any fine, but for whether it helped preserve competition before the market forgot what genuine rivalry looked like.


khnews@heraldcorp.com