KFTC says Google discouraged App Store competition

The regulator argues that the structure of the agreements increased incentives for developers to prioritize Google’s marketplace, reducing the ability of competing platforms to attract major game releases

South Korea’s competition regulator has formally accused Google of abusing its dominant position in the Android app distribution market, alleging that a developer incentive program discouraged competition by encouraging game publishers to prioritize Google Play over rival app stores.

According to Android Headlines the Korea Fair Trade Commission (KFTC) has issued an examiner’s report concluding that Google’s conduct may have violated the country’s competition law. The report represents a significant procedural step in an investigation that has examined Google’s relationships with mobile game developers over several years.

The KFTC alleges that Google’s developer support initiative, internally known as “Project Hug” and externally referred to as the Games/Google Velocity Program, offered financial and promotional benefits to game developers under conditions that favoured distribution through Google Play.

The regulator argues that the structure of the agreements increased incentives for developers to prioritize Google’s marketplace, reducing the ability of competing platforms to attract major game releases.

The case centres on whether Google’s incentive arrangements amounted to an abuse of market dominance rather than traditional pricing practices.

According to the KFTC’s findings, the agreements allegedly weakened competition by making it less attractive for developers to distribute titles through rival Android marketplaces, including South Korea’s OneStore. Regulators contend that the program effectively created exclusive dealing incentives, even if developers were not explicitly prohibited from using competing stores.

The competition authority estimates that the alleged conduct affected approximately 14.16 trillion won (about $9.1 billion) in relevant revenue during the investigation period. If the commission ultimately determines that Google violated South Korean competition law, the company could face corrective measures and a financial penalty based on the affected revenue.