South Korean trade watchdog says Google abused Android app store dominance

• Google's 'Project Hug' (officially Games/Google Velocity Program) ran from July 2019 to March 2026, offering financial support to developers who launched games on Google Play with terms at least as favorable as rival app stores
• The program's progressive payment structure increased financial support as developers generated more revenue through Google Play, creating stronger incentives to prioritize Google's marketplace over competitors like South Korea's OneStore
• Google faces a potential fine of up to 6% of the $9.1 billion in affected revenue and has eight weeks to respond before the Korea Fair Trade Commission issues a final ruling

Summary: South Korean Regulators Accuse Google of Android App Store Abuse

South Korea's Korea Fair Trade Commission (KFTC) has alleged that Alphabet's Google abused its dominant position in the Android app marketplace, affecting 14.16 trillion won ($9.1 billion) in revenue. The regulator plans to recommend corrective measures and financial penalties.

Key Program Details:

The KFTC's investigation focused on Google's "Games/Google Velocity Program," internally dubbed "Project Hug," which operated from July 2019 to March 2026. Under this program, Google offered financial support to game developers for using Google services (Cloud, Ads, YouTube) on the condition that they launched games on Google Play with terms at least as favorable as competing app stores.

Anti-Competitive Practices:

According to the KFTC, the contracts were structured to progressively increase financial incentives as developers generated more revenue through Google Play. This allegedly reduced developers' motivation to distribute games through rival platforms, particularly South Korea's OneStore, effectively forcing developers into exclusive arrangements with Google.

Potential Penalties:

If the commission concludes Google violated antitrust laws, the company could face a fine of up to 6% of the affected revenue—potentially up to $546 million based on the $9.1 billion figure cited.

Google's Response:

Google denies wrongdoing, stating it "competes fairly with other app stores" and delivers benefits to Korean developers and consumers. The company has eight weeks to submit a written response and review evidence before the KFTC issues a final ruling.

Market Implications:

This case adds to growing global scrutiny of Big Tech's app store practices and could set precedent for similar regulatory actions in other jurisdictions.