Russia Says Google Has “Violated Competition Rules” With Android, Yandex Stock Jumps

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Back in February, the “Google of Russia,” Yandex, filed an antitrust complaint with Russia’s watchdog agency (FAS) over Google’s leverage with what comes pre-installed on Android. Specifically, the fact that Google is the default search engine rubbed Yandex the wrong way.

See, Yandex has a 60 percent search hold overall, but Android phones account for 86 percent of all smartphones sold in Russia. You see the mounting issue here.

Today, Google has been found guilty of anti-competition practices, sending Yandex stock on a nice climb.

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The Deputy Head of FAS Russia, Alexey Dotsenko, said today that within 10 working days FAS Russia will make its decision in full and send the official order for Google to “terminate abuse of dominant position.”

In particular, FAS Russia can prescribe it to adjust the agreements with the manufacturers of mobile devices, eliminating them from the agreements with those items that restrict the installation of these devices applications and services to other developers.

Google gave TechCrunch a statement, making it clear that it won’t have anything to say until the final edict comes down:

We haven’t yet received the ruling. When we do we will study it and determine our next steps.

Here’s the official statement from Yandex on the ruling, which knows that its future of dominance in Russia hangs in the balance:

We welcome the positive ruling of the Federal Antimonopoly Service, which took up this complex case and, having examined the evidence, recognised a violation on the part of Google. We are waiting for the ruling and full decision.

The actions that were the subject of the FAS’s investigation include: firstly, bundling apps from GMS with the Google Play store; secondly, the requirement to preinstall the Google search engine by default; and thirdly, the requirement to give Google app icons preferential placement on the first screen. At the same time, Google Play was available only if all these conditions were met. In addition, the investigation confirmed the existence of agreements on prohibition of preinstallation of competitors’ apps – in part, it was not denied that Yandex was specified in these agreements.

Although the European Commission has already begun a formal investigation in relation to these same practices, Russia is the first jurisdiction to have officially recognised these practices as anticompetitive. Internationally, there are successful precedents of similar rulings. In 2009, the European Union undertook an investigation in which Google participated alongside Opera and Mozilla, as a result of which Microsoft was forced to offer European users a choice of browsers upon a computer’s first launch.

We believe the FAS’s decision will serve to restore competition on the market.

I’m sure there will be an appeals process of some sort, jamming up any final actions in the courts for a while. It’s a hit for Google, which has been fighting off a few similar cases, including one over shopping options in search results.

Desktop dominance won’t do it for Yandex, or any player in search, as everything has gone mobile and most large players in search, even Yahoo, is fighting to own the mobile search experience…whatever that ends up being.

No word from the “holy crap you copied our whole company” watchdog in regards to Yandex’s entire existence.