Discover what's up in the business of marketing each Friday.
South Korea Drops Antitrust Investigation Against Google
In early 2011, South Korean search and portal providers NHN Corp. and Daum Communications filed antitrust complaints with the South Korean equivalent of the US Fair Trade Commission against Google. Both companies claimed that Google had blocked them from putting their search apps on Android phones in South Korea. Today, it was reported (via NextWeb) that Google has been cleared in the investigation.
NHN’s complaint originally alleged that “Google has banned South Korean phone manufacturers from including Web search applications made by other companies under its marketing contracts . . .” Daum made similar claims. However, according to South Korea’s Yonhap News, Google’s minority market share in the market was the deciding factor:
“Before and after Google’s push to force the preload of the Android operating system, its domestic market share remains almost unchanged at around 10 percent, while Naver (the portal of NHN) still maintains more than 70 percent,” an FTC official said on condition of anonymity.
“This does not satisfy the competition-restricting condition, which is one of the major issues of this case.”
He added that the FTC made the decision also based on the fact that mobile phone users can easily find alternatives to Google’s search engine by downloading applications provided by NHN and Daum.
More than 70 percent of the smartphones sold in South Korea are Android devices. Yet, NHN and Daum have roughly 90 percent of the South Korean search market between the two companies. The South Korean FTC said this market share distribution was unchanged by any Google-Android preloading requirements.
Thus, the agency decided that competition had not been harmed or adversely impacted by Google’s conduct in the market. By implication, if Google had been a larger player in the market, the outcome might have been different.