South Korean portals file competition complaint against Google

SEOUL Fri Apr 15, 2011 7:38am EDT

SEOUL (Reuters) - South Korea's top internet portals filed a complaint on Friday with antitrust regulators against Google Inc, alleging the search giant was unfairly stifling competition in the domestic mobile internet search market.

The move comes after Microsoft Corp filed a similar complaint against the world's top internet firm with European Commission regulators last month.

In their joint complaint to South Korea's Fair Trade Commission (KFTC), NHN Corp and Daum Communications Corp, South Korea's top internet portals, said Google was unfairly impeding competition by using its status as a dominant smartphone operating system provider.

Competing web browsers and portals are rushing to gain a bigger share of the fast-growing mobile market, which is now outpacing expansion of the personal computer industry.

"Smartphones using (Google's) free Android operating system have Google's search engine installed as a default navigation tool and are systematically designed to make it virtually impossible to switch to another option," NHN said in a statement.

"This limits opportunities for companies offering similar services to compete on a level playing field, restricts consumers' choices and discourages the growth of the mobile internet market as telecoms operators and handset makers will not be encouraged to offer differentiated products and services."

"We have not yet been contacted by the KFTC but will work with them to address any questions they may have," a Google spokesman told Reuters.

"But Android is an open platform, and carrier partners are free to decide which applications and services to include on their Android phones."

Daum said Google's argument it allows carriers and phone vendors free choice is not plausible, given that its mobile search market share in Korea grew more than 10-fold last year while its fixed-line presence remained negligible.

Google enjoys a near 20 percent share of Korea's mobile internet search market despite its market share remaining at around 2 percent in the country's fixed-line internet segment, the smallest of major portals including NHN, Daum and Yahoo Inc, according to industry data released by Daum.

Google's Android operating system has stormed the smartphone market. It is widely expected to become the No.1 platform this year and has also emerged as the only viable solution for tablet makers who do not own their own operating system.

The smartphone market will grow 58 percent this year and Android will account for 39 percent of the market, while the tablet market is likely to quadruple this year to 70 million units, according to research firm Gartner.

(Reporting by Miyoung Kim; Additional Reporting by Jonathan Hopfner; Editing by Matt Driskill)