South Korea accuses Google of abusing Android app store dominance

South Korea’s antitrust regulator accused Google of abusing its dominance in the Android app market by using a revenue-linked support program to steer game developers toward Google Play and away from rival stores. The Korea Fair Trade Commission said the alleged conduct touched 14.16 trillion won, or about $9.1 billion, in revenue, and gave Google eight weeks to submit a written response before the full commission issues a final ruling.

At the center of the case is Google’s internal Games/Google Velocity Program, also known as Project Hug. The KFTC’s Market Surveillance Bureau alleges the program gave financial support to game developers from July 2019 through March 2026 on the condition that they launched games on Google’s app store on terms at least as favorable as rival marketplaces. The bureau alleges the support increased as developers earned more through Google Play, a structure that strengthened incentives to prioritize Google’s marketplace. Regulators allege that reduced developers’ willingness to distribute games through rival app stores, including South Korea’s One Store, and pushed some publishers into de facto exclusive dealing with Google.

Google dominates Android distribution in South Korea. One Store, backed by SK Telecom, KT, LG Uplus and Naver, remains in the 10 percent range. The new probe involves 22 domestic and foreign game companies, and investigators are also examining alleged most-favored-treatment contracts tied not only to Google Play, but also to Google Cloud, Ads and YouTube usage.

The fresh action follows an earlier showdown between the same regulator and Google. In April 2023, the KFTC imposed a provisional 42.1 billion won penalty and ordered corrective measures over a separate app-store case, finding that Google had used Play Store promotions and overseas-launch support to keep game publishers from freely releasing on One Store. That case covered conduct from One Store’s launch in June 2016 until the investigation began in April 2018. South Korea passed a landmark app-store law in 2021 aimed at forcing dominant operators to permit alternative payment systems.

Google maintains Google Play competes fairly in Korea and delivers benefits to developers and consumers, and that it cooperated with the investigation while denying any violation. Jung Hee-eun, director of market surveillance at the KFTC, argues that commissions and other costs can block a game company’s incentive to launch in a new app market. If the commission finds an abuse of market dominance, the legal ceiling cited by regulators would allow a fine of up to 6 percent of the affected revenue, a penalty that could dwarf the 2023 case if imposed at the top of the range.