The Korea Fair Trade Commission (KFTC) on Tuesday said terms with device makers amounted to abuse of Google's dominant market position that restricted competition in the mobile OS market.
Google in a statement said it intends to appeal. It said the ruling ignores benefits offered by Android's compatibility with other programs and undermines advantages enjoyed by consumers.
The fine comes on the day an amendment to South Korea's Telecommunications Business Act - popularly dubbed the "anti-Google law" - came into effect.
The law now bans app store operators such as Google from requiring software developers use their payment systems - a requirement which effectively stopped developers from charging commission on in-app purchases.
