U.S. Department of Justice: Google paid 36 trillion won to Samsung and Apple to monopolize the search market

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Anti-monopoly law violation lawsuit against Google
Google explains, “This is for consumer convenience.”
When the U.S. court ruled in favor of the Justice Department,
There is a possibility that the Fair Trade Commission may launch an investigation in Korea as well.

“Google paid large sums of money to smartphone manufacturers such as Samsung and Apple to monopolize the online search market.” (U.S. Department of Justice)

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“The payment was made to ensure that Google operates properly on the smartphones of the respective manufacturers. “It was a measure for consumer convenience.” (Google CEO Sundar Pichai)

In the trial of the anti-monopoly violation lawsuit filed by the U.S. Department of Justice against Google, a fierce battle took place between the two sides. At the trial held in Washington federal court on the 30th of last month (local time), CEO Pichai testified for over three hours.

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Previously, the U.S. Department of Justice announced that in 2020, Google would pay $26.3 billion (approximately 36 trillion won) to mobile phone manufacturers and wireless carriers such as Samsung and Apple in return for setting Google’s web browser, Chrome, as the default search engine for smartphones. They filed a lawsuit alleging that the company had illegally maintained its search engine monopoly by making payments and using profit sharing as leverage. There is a lot of interest in the industry, saying that the ‘trial of the century’ was held after the Microsoft (MS) antitrust ruling that put an end to the ‘Internet bundled sales controversy’ in the late 1990s.

CEO Pichai, who appeared in court that day, admitted that he had paid money to the smartphone manufacturer, but explained that it was to ensure that the company’s search engine operates smoothly. The idea is that if financial incentives were not provided to Apple, which already operates its own web browser ‘Safari’, there was concern that it would try to reduce the usability of Chrome. According to the New York Times, of the $26.3 billion paid by Google to manufacturers, $18 billion went to Apple.

In response to Microsoft CEO Satya Nadella, who appeared as a government witness on the 2nd of last month, saying, “Competition is virtually impossible due to Google’s dominance in the search market,” CEO Pichai said, “Microsoft’s Internet Explorer is updated once every one to two years.” Chrome released a new version every six weeks. “Chrome’s search dominance is the result of innovation and early investment,” he countered.

Depending on the results of this trial, Google, which accounts for 90% of the U.S. search market, may have to split its major businesses, including search. In the United States, if it is proven that a company has violated anti-trust laws, the company can be divided into several companies and their ownership can be restricted.

If the U.S. court rules in favor of the U.S. Department of Justice, there is a possibility that the Fair Trade Commission or Korea Communications Commission will begin a related investigation in Korea as well. The Fair Trade Commission previously cleared Google of preloading search services and apps on smartphones based on the Android operating system (OS) in 2013.

However, unlike at the time when Google’s share in the domestic search market was only around 10%, its share from January to September this year was 30%, quickly catching up with Naver (58.1%), which ranked first. In fact, in 2021, the Fair Trade Commission imposed a fine of over 200 billion won along with a corrective order in relation to charges that it forced manufacturers such as Samsung Electronics to use only Google OS.

There is an analysis in the information technology (IT) industry that if Google loses, Samsung Electronics and Apple will not be free from responsibility. Currently, Samsung Electronics smartphones come with Google apps such as Chrome and Gmail (e-mail) installed as standard. Samsung Electronics has not released an official position regarding this lawsuit.

Recently, governments in major countries around the world are pulling out their swords at large platform companies. In Korea, Google was fined 40 billion won by the Fair Trade Commission in April this year for interfering with the release of competitors’ games by mobile game companies in order to strengthen the monopoly position of the app market ‘Google Play’.

Source: Donga

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