KFTC’s Google probe slow off the blocks, despite local reports

20 March 2017 1:20pm

14 February 2017. By Danbee Lee.

The Korea Fair Trade Commission has yet to make a concerted push in its investigation of Google's alleged abuses of dominance, despite local reports suggesting otherwise, MLex has learned.

MLex previously reported that the KFTC had carried out an on-site inspection at Google's Seoul offices last July. That investigation came after the KFTC began monitoring Google in April for possible dominance abuses, following the European Commission's filing of formal antitrust accusations against the US-based search giant.

More than six months on from the regulator's on-site inspection, MLex has been told that there has been little movement in the investigative process. The KFTC is still in the early stages of gathering data and material to review. That could be due to the difficulty of confirming abuses of dominance by Google, given ambiguities in market definitions and the impact of any such conduct. The competition agency also launched and closed a case involving Google in 2013, which may have given it pause for thought before it launches a full-blown probe. In addition, an enormous corruption scandal involving South Korea's president that potentially implicates the agency itself may have put the brakes on activity in the state bureaucracy overall, MLex was told.

Yesterday, Jeon Hae-cheol, South Korean legislator who raised concerns over Google's alleged misconduct during a KFTC parliamentary hearing last year, released a statement saying that the KFTC was looking into whether the company had interrupted Samsung Electronic's development of an operating system using its dominant position through the Anti-Fragmentation Agreement. That agreement states that Samsung cannot develop a new operating system using Android's algorithms. The matter is an issue distinct from the allegations that the KFTC reviewed in 2013.

The KFTC is also looking into whether unfair conduct stemmed from the Mobile Application Distribution Agreement between Google and its partners. The distribution agreement requires that all of Google's Android apps must be pre-installed as a package, rather than as single, selected apps, and that Google is set as the default search engine on the home screen. This is similar to the 2013 case, in which the KFTC conducted an investigation into alleged abuses of dominance by Google in the mobile search market, but closed the probe after concluding that it was possible for Google's rivals, mobile-network providers and handset makers to pre-load apps and services.

Jeon stated a claim, based on KFTC documents, that the agency was reviewing whether a case cleared previously could be re-investigated in light of new facts and changes in the mobile market. The legislator was cited as saying that the KFTC was focusing mainly on whether Google had restricted competition in the domestic mobile operating system market, in which it has a market share of more than 80 percent.

Despite the attention paid to the KFTC's investigation of Google, MLex was told that there has not been significant progress, and that the regulator was likely to monitor the firm and refer to the European Commission's progress in its Google antitrust investigations.

MLex reported yesterday that European antitrust chief Margrethe Vestager said the European Commission was doing its "utmost" to move quickly on several of those antitrust probes.

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