Google is set to face a review by the Korea Fair Trade Commission (KFTC) over allegations of engaging in unfair business practices by exploiting its dominant position in the app market.

Google, which operates the Google Play Store, has been entering into "Project Hug" agreements—also known as GVP (Google Play Value Program)—with major domestic and international game developers since 2019.

The KFTC explained that these contracts included provisions preventing game developers from offering unfavorable terms to Google Play compared to other app markets regarding the release timing or service quality of new games.

If game developers adhered to these conditions, Google provided support for the usage fees of its platform services, such as YouTube and cloud services. The structure was designed so that the scale of support increased as the game revenue generated through Google Play grew.

The KFTC determined that such agreements significantly weakened the incentive for game developers to enter competing app markets.

[Interview] Jung Hee-eun / Director of Market Surveillance at the Korea Fair Trade Commission: "Because there are costs involved (such as commissions), there could be an incentive to create a new app market and launch games there, but that incentive itself was blocked." The KFTC has submitted an investigation report to the commission requesting corrective orders and fines for Google, and has also sent the report to Google.

The revenue related to the violation, as calculated by the KFTC, stands at 9.21 billion dollars, which exceeds 14 trillion Korean won.

Under the law, fines can be imposed up to 6 percent of the revenue related to the violation.

Consequently, the possibility of a fine of up to 850 billion won being imposed following the deliberation process has been raised.

Previously, three years ago, Google was fined 42.1 billion won for restricting game developers from trading with competing app markets.

The KFTC plans to hold a plenary session to decide on final sanctions after going through procedures to guarantee Google's right to defense, such as listening to the company's arguments.

Google stated, "We compete fairly with other app markets," and added, "We will do our best to explain that there were no illegal activities during the deliberation process."

Reported by Chae Hee-sun | Video by EJAE | Video Editing by Yoon Tae-ho | Produced by SBS Digital News