SKorea to fine Google $177M for forcing software on devices

SEOUL, South Korea (AP) — South Korea’s competition watchdog plans to fine Google at least 207.4 billion won ($177 million) for allegedly blocking smartphone makers like Samsung from using other operating systems, in what would be one of the country's biggest antitrust penalties ever.

The announcement on Tuesday came as South Korea also began enforcing a revised telecommunications law that prohibits app market operators like Google and Apple from requiring smartphone users to pay with their in-app purchasing systems. It is the first nation to adopt such regulations.

South Korea has always closely scrutinized how foreign technology companies behave in its market. Much of the focus in recent years has been on Google and Apple as officials vowed to prevent them from abusing their dominant market positions in mobile internet.

Joh Sung-wook, chairwoman of South Korea's Fair Trade Commission, said Google has hampered competition since 2011 by obligating its electronics partners to sign “anti-fragmentation” agreements. This has prevented the companies from installing modified versions of Google’s operating systems on devices like smartphones and smartwatches. That gave Google an easy way to cement its leadership in mobile software and app markets, she said.

Joh said manufacturers like Samsung and LG had to agree to the terms when signing contracts with Google for app store licensing or early access to computer codes so that they could build devices in advance before Google released new versions of its Android and other operating systems.

Samsung, the maker of the globally popular Galaxy Android phones, suffered a huge setback in 2013 when Google forced it to abort its plans to use a customized version of Google software on its Galaxy Gear smartwatches.

Samsung switched to a...