Google’s Android Rules Found To Violate Russian Competition Law
Regulator agreed with complainant Yandex that Google was giving unfair advantage to its own mobile apps.
Prompted by a complaint from Russian search engine Yandex, in February, Russia’s competition regulator opened an antitrust investigation into Google control over Android. Earlier today, the regulator ruled in favor of Yandex and against Google.
Google has yet to receive the formal ruling, which has also not been publicly released. However, if the ruling holds, it could mean potential fines of up to 15 percent of Google’s 2014 Russian revenues, according to the BBC.
Yandex had complained that Google was violating Russian competition law by requiring pre-installed or default Google apps on Android (Maps, YouTube, etc.). Yandex offers a number of competing mobile apps. And while Yandex is the dominant PC search engine in Russia, Android is the dominant smartphone OS in the country.
Kantar Worldpanel data show Android on nearly 80 percent of Russian smartphones, with Windows in second position and iOS third.
Google has access to some sort of judicial appeals process, though it’s not immediately clear what the company’s next moves in the country will be. Even though Russia is right now a kind of pariah among nations, this decision will embolden Google critics and litigants in Europe.
There’s currently an early Android antitrust investigation percolating in Europe. However, last month, Google answered the European Commission’s formal Statement of Objections regarding alleged market abuse in shopping search.
Google SVP and General Counsel Kent Walker strongly denied that Google had abused its market position in search and said the evidence didn’t support the European Commission’s conclusions. If the Commission is unpersuaded by Google’s arguments, which is likely, the company can appeal any penalties or fines imposed.
In addition to imposing fines, Russian regulators apparently have the authority to compel Google to change its business practices regarding app-bundling in Android. It’s likely they will ask Google to put its apps on the same footing as competitors.
I suspect the European Commission will ultimately also seek to block Google apps from a privileged, pre-installed position on Android, looking to the Russian case as a precedent of sorts, as well as their own decision several years ago involving Microsoft’s Windows PC operating system and unbundling of the Explorer browser.