SEOUL, July 01 (AJP) - South Korea's antitrust regulator has launched formal proceedings against Google, accusing the U.S. tech giant of using financial incentives to induce major game developers to give preferential treatment to its Play Store, in what authorities describe as an abuse of its dominant market position.
The Korea Fair Trade Commission (KFTC) said Wednesday it had sent an examiner's report to Google, marking the start of deliberations that could lead to corrective orders and a fine of up to 849.6 billion won ($547 million).
The case targets Google LLC in the United States, Google Asia Pacific Pte. Ltd. in Singapore and Google Korea.
According to the KFTC, Google signed agreements with 22 domestic and foreign game developers between July 2019 and March 2026 under its Games/Google Velocity Program (GVP), internally known as "Project Hug." The agreements required developers to launch games on Google Play under conditions that were at least as favorable as those offered on rival app stores, including release timing and service quality, in exchange for financial support for Google Cloud, Google Ads, YouTube and other Google services.
The regulator alleges the contracts were structured so that Google's financial support increased as developers generated more revenue through Google Play, creating strong incentives to prioritize Google's marketplace over competitors.
The KFTC said the arrangement significantly reduced developers' incentives to distribute games through competing app stores, including Korean app marketplace OneStore, effectively forcing developers into de facto exclusive dealing with Google and hindering rivals' business activities.
Google's Play Store has maintained more than an 80 percent share of South Korea's Android app market, according to the regulator.
The regulator also said the agreements discouraged some companies from launching their own app marketplaces.
The KFTC estimated that Google's alleged conduct affected $9.22 billion in relevant revenue in Korea, allowing the commission to impose a fine of up to 6 percent of that amount under the country's antitrust law. The examiner recommended corrective measures and financial penalties, describing the alleged violations as "very serious."
The case marks Google's second major antitrust action in Korea involving its app marketplace in three years.
In 2023, the KFTC fined Google 42.1 billion won (about $32 million at the time) after finding that the company offered marketing and overseas expansion support to game developers on the condition that they did not release games on rival app store OneStore.
Because the latest alleged violations occurred within five years of the previous case, any eventual fine could be increased under the regulator's penalty guidelines, although the statutory maximum remains unchanged.
Google has up to eight weeks after receiving the examiner's report to submit a written response and review the evidence before the commission issues a final ruling.
The KFTC said it plans to reach a decision as quickly as possible, calling the case significant for restoring competition in South Korea's app marketplace.
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