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The KFTC was right the first time: Android is a boon to Korea's economy

2016-08-06 14:09:35 0 comments

Geoffrey A. Manne (Executive Director of the International Center for Law and Economics)*

Android is one of the world’s most successful open platforms. It has undeniably engendered a remarkable level of economic growth and creativity in the mobile economy — particularly in South Korea. From providing consumers with greater choice and lower prices to facilitating unprecedented innovation by app developers and device makers, Android’s operating system is at the center of the mobile revolution[1] — and it is no exaggeration to say that Android has placed South Korea squarely at the forefront of the global mobile economy.

So why is Android the focus of renewed antitrust attention and complaints that Google’s business practices around the mobile OS are harming competition in Korea?

In 2011, in response to similar complaints from two Korean search giants, Naver and Daum, the Korea Fair Trade Commission (KFTC) engaged in a thorough investigation into Google’s Android-related business practices. The investigation ended in 2013 with the KFTC rejecting all of the allegations against the company.

But in light of the European Commission’s recent Statement of Objections alleging harms to competition in Europe, there have been calls in major media publications for the KFTC to carry out exactly the same investigation again, even though competitive conditions haven’t changed since the last investigation.

The KFTC should once again reject these calls for regulation that benefits competitors rather than consumers, and remain one of the vast majority of world antitrust regulators[2] that have found no basis to bring a challenge against Google.

The European Commission’s complaints against the company are fundamentally based on the theory that Google’s aim is to “preserve and strengthen its dominance in general internet search.” But it can hardly be said that bundling Google Search with Android serves to “preserve” Google’s dominant search position in Korea. For one thing, despite some recent gains, Google’s search market share[3] has long been negligible compared to its primary domestic competitors, and Android has done little to dent their dominance. And if the practice is meant to lift Google up from its relatively weak position in search, it has been decidedly unsuccessful thus far.

Google simply doesn’t have the ability (nor the inclination) to harm consumers or competition in Korea in the manner alleged by the European Commission.

In Korea, Google, with its branded Android operating system, remains a significant but — importantly — non-dominant player. While some Android devices install Google services, many others do not.[4] Nor do Google’s practices lock device manufacturers into Android at all, as Samsung’s burgeoning Tizen operating system ecosystem demonstrates.

The KFTC looked at these facts in 2013 and concluded that Google had not engaged in behavior to harm competition. If anything, the economic conditions supporting that conclusion have only gotten stronger since.

Today manufacturers are deploying Android to power phone and tablets but also watches and TVs. Developers are building an ever-widening array of apps and software for this ecosystem, bolstered by the cross-device interoperability that Android affords. In fact, among the apps being sold in Google’s (global) Android app store, South Korea boasts the fifth highest number of developers.[5]

Meanwhile, the average South Korean smartphone user downloads 40 apps,[6] more than in any other country — nearly all of them free. Whatever else may be said about the bundling of Google Play with Android, it can’t be seriously argued that it has harmed the ability of South Koreans to access the apps of their choice, including apps made by Google’s Korean search competitors, several of which are among the app store’s top downloads.[7] 

One has only to look at Korea’s vibrant[8] and informed[9] mobile marketplace to see there is no evidence to suggest that Google has harmed app developers’ incentives to innovate, either. Korean mobile app companies are thriving. Color-Note, a Korean mobile media business, has exhibited remarkable growth. And KakaoTalk,[10] a Korean messaging platform, not only minted a billionaire, but was one of the companies at the forefront of integrating messaging platforms with a wide range of other apps — a technological development now being wielded by Facebook’s Messenger app to challenge the supremacy of app stores[11] like Google’s.

Consumers in South Korea are among the most savvy tech adopters in the world. The country’s embrace of the Android platform has served to encourage immense innovation, and developers, device manufacturers, consumers and competitors have all benefitted as a result. 

Korea should not blindly follow Europe when it comes to internet regulation. The KFTC has already conducted an investigation into Google’s practices in the country and found no evidence of harm to competition. Korea has a thriving digital ecosystem and is a global leader precisely because regulators have focused on supporting Korean innovation. They should continue on that path to continued economic success.


* Geoffrey A. Manne is the founder and Executive Director of the International Center for Law and Economics, based in Portland, Oregon. In 2015 he was also appointed to the U.S. Federal Communications Commission's Consumer Advisory Committee, where he chairs the Broadband Working Group. Manne is an expert in the economic analysis of law, drawing on two degrees from the University of Chicago. He specializes in antitrust, telecommunications, consumer protection, intellectual property, and technology policy.

[1] Readwrite, “How We Are Entering The Second Phase Of The Mobile Revolution,” available at

[2] Truth on the Market, “Oh competition, we stand guard on thee”, 2016/04/19, available at:

[3]ReturnonNow,“2015 Search Engine Market Share By Country”, available at:

[4] For instance, Devices running Fire OS such as the Amazon Fire Phone and Tablet series do not carry any Google apps. C.f.

[5] Yonhap News, "Last year in South Korea Google Play apps overseas sales grew year-on-year by 4 times” , 2015/03/19, available at:

[6] Mashable, “The average smartphone user downloads 25 apps”, 2013/09/05, available at:

[7] AppAnnie, “Top apps on Google Play South Korea, May 2016”, available at:

[8] Yonhap News, "S. Korea’s smartphone market growth forecast to turn negative this year” , 2013/10/14, available at:

[9] Korea Times, “Korean’s change phones most often”, 2013/04/07, available at:

[10] Forbes, “Mobile Master: KakaoTalk Creator Becomes One Of South Korea's Richest Billionaires”, 2014/09/24, available at:

[11] CultofAndroid, “Facebook Messenger wants to be your chatty pipeline to the world”, 2015/04/25, available at:

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