Google was fined roughly $177 million by South Korea’s antitrust commission on Tuesday for allegedly abusing its market dominance.
According to Bloomberg, the Korea Fair Trade Commission has accused Google of shutting off competition because its Android operating system controls over 80% of the global smartphone industry.
According to Yonhap News, the regulator found that the anti-fragmentation agreement that Google requires smartphone manufacturers to sign for contracts impedes competition and inhibits innovation.
Device makers, including Samsung and LG in Korea, are prohibited from developing or using modified versions of Android OS known as “Android forks” on their smartphones under the AFA.
In addition to the approximately $177 million fine, the KFTC barred Google from forcing manufacturers to sign AFA contracts in the future and ordered it to amend current agreements.
In a statement to CNBC, a Google spokeswoman said the company intends to appeal the ruling.
The regulator, according to the spokeswoman, did not take into account Android’s compatibility program, which spurred innovation and improved user experience.
“The KFTC’s decision released today ignores these benefits, and will undermine the advantages enjoyed by consumers,” the spokesperson told CNBC in the statement.
CNBC noted that the regulator’s fine is small in comparison to Google’s parent company Alphabet’s nearly $62 billion in revenue reported in the last quarter.
Still, the decision follows other efforts by South Korean lawmakers and regulators to reign in the tech giant’s market dominance.
On Aug. 31, South Korean lawmakers passed a bill into law, which revises the country’s Telecommunications Business Act, to allow app developers to avoid paying commissions to store operators, such as Google and Apple, for in-app purchases by using third-party apps instead. The new law allows the country’s media regulator to fine violators up to 3% of their annual South Korean revenue.
More recently, the KFTC has turned its attention to local online platforms, Kakao and Naver. KFTC vice chairman Kim Jae-shin said during a policy symposium Friday the agency was looking to cracking down on online giants that unfairly use market dominance, adding that Kakao and Naver have abused their roles to drive traffic to their products and services.