Google Inc. (GOOG) been playing dirty with Android? That's the allegation raised
by some South Korean rivals. The smartphone and tablet OS may be dominating in sales, but it's also drawing
increasing antitrust scrutiny in both the U.S. and South Korea.
South Korea antitrust regulators' pending investigation of the Android
accusations heated up this week with authorities raiding Google's Seoul
offices, according to a Wall Street Journal report.
In South Korea, search portal firms NHN Corp. (SEO:035420) and Daum Communications
Corp. (KDQ:035720) have accused Google
of using their control of Android to block rival search portals on smartphones.
The companies do not accuse Google of overtly blocking their portals,
rather they say that Google's bundling of a search engine with Android and
making it labor intensive to "swap in" a different search amounts to
an anticompetitive tactic.
An NHN spokesperson commented, "It does not allow fair competition among
search engines if Android-based smartphone users come across Google Search
whenever they touch the search engine icon, whether they want it or not."
South Korea's Korean Fair Trade
Commission (KFTC), the counterpart of the U.S. Federal Trade Commission, is tasked with
investigating these antitrust investigations.
Currently NHN controls 52 percent of South Korea's mobile search traffic, with
Google controlling 16 percent and Daum controlling approximately 15 percent.
Android plays a key role in the South Korean market with top tech
conglomerates Samsung Electronics Comp., Ltd. (SEO 005930) and LG Electronics Inc. (SEO:066570) using Android as their
operating system platform of choice for tablets and smart phones.
Google promises to work with the KFTC to resolve the dispute. A
spokesperson comments, "We will work with the KFTC to address any
questions they may have about our business. Android is an open platform, and
carrier and OEM [original equipment manufacturer] partners are free to decide
which applications and services to include on their Android phones. We do not
require carriers or manufacturers to include Google Search or Google
applications on Android-powered devices."
This is the second time in just the last four months that South Korean police
have raided Google's offices. The prior raid came in May, for a separate issue
that Google claims was an innocent mistake.
Between 2006 and 2009 Google believes it "accidentally"
collected a large amount of fragments of traffic on open wireless
networks. It says the collection occurred due to a piece of test code
that was unwittingly incorporated into the Street View project -- Google's
fleet of internet-equipped cars that offer a ground-level view of streets for
In Europe Google has already been forced to hand data over to authorities.
And it faces further investigations
in Canada and in four U.S. states. In South Korea authorities
are probing the incident thoroughly, combing through data they seized from
Google's AdMob advertising service.
Google claims that it never used the collected data for advertising purposes,
but South Korean authorities' thorough examination of AdMob would indicate that
this might not have been the entire truth. Nonetheless, Google has yet to
face any official charges for the data collection in South Korea or elsewhere.
However, Google does face a broad antitrust probe in the U.S. and
similar antitrust probes in the EU and Asia. The company is also
facing a pending class action
lawsuit in the U.S. for the street view data collection and other
U.S. lawsuits filed by mobile service providers who claim Google bullied partners into
dropping their services.
quote: The companies do not accuse Google of overtly blocking their portals, rather they say that Google's bundling of a search engine with Android and making it labor intensive to "swap in" a different search amounts to an anticompetitive tactic.