South Korea Alleges Google Abused Android App Store Dominance, Eyes Major Fine

South Korea’s antitrust regulator has accused Alphabet’s Google of abusing its dominant position in the Android app marketplace, a move that could result in a significant financial penalty and new corrective measures if the allegations are upheld.

The Korea Fair Trade Commission (KFTC) said on Wednesday that its Market Surveillance Bureau completed an examiner’s report alleging Google engaged in anti-competitive practices that affected approximately 14.16 trillion won ($9.1 billion) in related revenue. The findings mark another high-profile regulatory challenge for Google as global authorities continue to scrutinize the company’s influence over digital markets and mobile app distribution.

According to the report, Google operated a program internally known as "Project Hug," officially called the Games/Google Velocity Program, between July 2019 and March 2026. Under the initiative, the company reportedly provided financial incentives to domestic and international game developers in exchange for favorable treatment of Google Play.

The KFTC alleged that developers received financial support tied to Google services such as Google Cloud, Google Ads, and YouTube, provided they launched their games on Google Play under conditions that were at least as favorable as those offered to competing app marketplaces.

Regulators also claimed the contracts were designed so that financial support increased as developers generated more revenue through Google Play. The KFTC argues that this structure encouraged developers to prioritize Google’s app store while discouraging them from distributing games through rival platforms.

According to the examiner’s report, the program substantially weakened competition by reducing developers’ incentives to work with alternative app marketplaces, including South Korea’s OneStore. Regulators believe the arrangement effectively pushed developers into de facto exclusive dealing with Google, limiting competitors’ ability to expand their businesses in the Android app ecosystem.

If the KFTC ultimately determines that Google violated South Korea’s competition laws by abusing its market dominance, the company could face a financial penalty of up to 6% of the relevant affected revenue, potentially amounting to hundreds of millions of dollars.

Google will have eight weeks after receiving the examiner’s report to submit a written response and review the evidence presented by the regulator. The KFTC said the full commission will then examine the case and issue a final decision after ensuring Google’s due process rights have been fully respected.

The case adds to growing global regulatory scrutiny of Google’s Android ecosystem, app store practices, and business relationships with developers as authorities seek to promote greater competition in digital marketplaces.