Google can no longer stop phone manufacturers from including a “forked” version of Android on their phones
This AFA prevents manufacturers from providing consumers with a “forked” version of Android. In other words, device makers cannot modify or customize Android. The KFTC says that this portion of the contract that Google makes manufacturers sign has helped Google’s Android operating system dominate the market. Under the regulatory agency’s ruling, Google can no longer force phone makers to sign the AFA which will allow them to install “forked” versions of Android on their phones.
The KFTC states that Amazon tried to recruit two other Android phone manufacturers, LG and Samsung, to use the “forked” version of Android that it created. But both manufacturers declined to follow Amazon. The Fire Phone turned out to be a flop. After writing off $170 million of unsold units, Amazon turned an aptly named “fire sale” in an effort to dispose of the remaining units.
In its ruling, the Korean antitrust agency mentioned LG, Samsung, and Alibaba Group Holding Ltd. as companies that were blocked from releasing new devices in South Korea because of Google’s restrictions. KFTC’s Sung-wook said at a briefing that “Google’s anti-fragmentation agreement blocked the entry of competitors to the mobile operating system space and obstructed business innovation by device manufacturers.”
The KFTC says it is not done with Google and is investigating in-app purchases among other things
Google says that it will appeal the decision and notes that the KFTC decision ignores the compatibility that Android offers and will eliminate some benefits of Android that consumers enjoy. The decision forces Google to rewrite current agreements that are still in force.
Tom Kang, a Seoul-based research director at Counterpoint Research, says that the decision will result in more phone manufacturers changing Android and offering custom versions of the software. Kang adds that Google might have to offer incentives to manufacturers in order to get them to stick to the company’s unified version of Android.
And the KFTC is not done with Google. The agency continues to investigate the Play Store, in-app purchases, and advertising.