Google Faces Antitrust Complaints in South Korea on Popularity of Android

Google Inc. (GOOG), the largest Internet- search company, is facing antitrust complaints in South Korea as mobile phones using its Android software gain dominance, adding to global scrutiny of the company’s businesses.

NHN Corp. (035420) and Daum Communications Corp. (035720), operators of South Korea’s two largest Internet search sites, said in statements today they filed complaints against Google with the country’s Fair Trade Commission for blocking local phone carriers and manufacturers from embedding their search applications in devices using the Android operating system.

“Android is an open platform, and carriers and partners are free to decide which applications and services to include,” Lois Kim, a Seoul-based spokeswoman for Google, said today by phone. “We’re looking forward to working with the FTC to address any questions they may have.”

Google is facing increasing scrutiny from regulators globally as it bolsters its search business. The U.S. Federal Trade Commission is considering a broad investigation into the Mountain View, California-based company’s dominance of the Internet-search industry, two people familiar with the matter said April 5. The European Commission and Texas Attorney General Greg Abbott have also begun probes into its business practices.

Photographer: Tony Avelar/Bloomberg

Google Inc.'s Android logo is displayed during a news conference at the company's headquarters in Mountain View, California, U.S. Close

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Photographer: Tony Avelar/Bloomberg

Google Inc.'s Android logo is displayed during a news conference at the company's headquarters in Mountain View, California, U.S.

Search Applications

Google has banned South Korean phone manufacturers from including Web search applications made by other companies under its marketing contracts, Seongnam-based NHN said in its statement. Google has delayed certifying the use of its software for handset makers that violated the condition, the South Korean company said.

Daum learned about Google’s practices while trying to have its applications installed and has evidence to prove its claims, the Seoul-based company said.

Kwon Cheol Hyun, head of the service-industry monitoring division at the FTC, declined to comment, citing internal policy not to speak to the press about ongoing or pending investigations.

The Android system, used in such devices as HTC Corp.’s Desire HD and Samsung Electronics Co.’s Galaxy S, surged more than nine-fold in 2010, according to Gartner Inc. research on units sales to end users. The Google operating system will likely become the world’s best-selling smartphone system this year with about a 40 percent share, passing Nokia Oyj (NOK1V)’s Symbian, which has about 21 percent, according to International Data Corp.

About 70 percent of the more than 10 million smartphones sold in South Korea were Android-based devices as of March 31, according to an estimate by Park Jong Soo, an analyst at Hanwha Securities Co. in Seoul.

NHN and Daum together control about 90 percent of Web searches on personal computers in South Korea, according to Lee Chang Young, an analyst at Tong Yang Securities Inc. in Seoul. Google’s share is between 1 percent and 2 percent, Lee said.

To contact the reporter on this story: Jun Yang in Seoul at jyang180@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

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