South Korea’s antitrust enforcer just lobbed another grenade at Google. The Korea Fair Trade Commission published an examiner’s report on July 1 alleging that the tech giant abused its dominant position in the Android app marketplace, a charge that could result in both corrective orders and a financial penalty.

The KFTC estimates that Google’s conduct negatively impacted roughly 14.16 trillion won, about $9.1 billion, in related app market revenue.

What Google allegedly did

The core accusation centers on Google’s developer incentive programs. Google allegedly structured deals that discouraged app makers and game studios from distributing their products through rival platforms like One Store, a competing app marketplace in South Korea.

This case is distinct from earlier KFTC actions against Google, which focused on different flavors of anti-competitive behavior. In 2021, the commission hit Google with a 207 billion won fine, approximately $177 million, for what it called anti-fragmentation practices. That case was about Google restricting device manufacturers from using modified versions of Android.

Then in 2023, the KFTC imposed another penalty of 42.1 billion won, roughly $32 million, for favoring its own Play Store through exclusivity incentives. The current allegations build on that thread but appear to go deeper into how Google’s promotional arrangements with developers specifically disadvantaged rival distribution channels.

Why South Korea keeps picking this fight

South Korea passed landmark legislation in 2021 that banned app store operators from forcing developers to use their proprietary payment systems. One Store, the rival platform at the center of this latest case, is backed by a consortium of South Korean telecom companies. The KFTC’s argument essentially boils down to this: even when a competitor exists, Google’s incentive structures make it economically irrational for developers to support that competitor in any meaningful way.

The KFTC said it intends to recommend corrective actions alongside a potential financial penalty. The commission has not yet disclosed the specific size of any proposed fine.

What this means for investors

For Google parent Alphabet, the direct financial exposure from a Korean fine is likely manageable. Even the largest previous KFTC penalty, $177 million in 2021, barely registered against Alphabet’s revenue.

Each regulatory action chips away at the business model that makes app stores so profitable. If the KFTC orders Google to change how it structures developer incentive programs, that creates a template other regulators can follow. South Korea’s 2021 payment system legislation, for instance, inspired similar rules in other markets.

The KFTC’s report made no mention of blockchain technology, digital assets, or cryptocurrency-related applications.

The next milestone to watch is the KFTC’s formal decision, which will specify both the corrective measures and any financial penalty.