At issue is how the company requires handset makers using its Android OS to also pre-load Google apps and services onto devices in order to get access to the Play app store — which Russian search rival Yandex had argued is a breach of local competition rules.
Earlier this month Russia’s Federal Antimonopoly Service (FAS) agency imposed a fine of 438M RUB (~$6.7M) on the U.S. search giant — following the upholding of the Android antitrust complaints by Russian courts earlier this year.
The original antitrust ruling against Android was handed down by the FAS last September.
In a statement last week regarding the fine FAS wrote:
Investigating the case, FAS Commission established that “Google” provided Google Play application stores to its counteragents – vendors of mobile devices to be preset on the devices controlled by Android OS and intended for sale in the Russian Federation (mobile devices), under the conditions including mandatory preset of Google applications and the search system and their mandatory placement in the priority positions on device home pages.
Actions undertaken by “Google” also led to prohibiting pre-set of applications from other vendors.
“We are convinced that executing the determination will enable competition development on the market of mobile software in Russia, which will have a favourable effect for consumers. All companies that supply products to the Russian Federation – including transnational corporations – must observe the Federal Law “On Protection of Competition””, pointed out Elena Zaeva, the Head of FAS Department for Regulation of Communications and Information Technologies.
It is not clear if Google will now pay the fine and amend its Android requirements for OEMs in Russia or whether it intends to continue trying to fight the ruling. But according to sources the company will have eight days to comply with the original FAS’ ruling once the final court judgement has been issued — or face another fine.
We’ve reached out to Google for comment and will update this post with any response.
Commenting on today’s ruling in a statement, a Yandex spokesman added: “We are satisfied with today’s Moscow Arbitration Tribunal decision. This decision confirms the FAS findings of the investigation into Google’s anti-competitive practices on Android.”
The case has potentially wider implications beyond the Russian market, given an extant European antitrust probe of the Android OS. The EC’s competition commissioner issued a formal Statement of Objections against Android back in April, following a year of investigation into rivals’ complaints about Google’s business practices with Android.
“Th[e] tie between Play Store and other [Google] apps is what we see as a very problematic behaviour,” said EC antitrust commissioner Margrethe Vestager at the time. “There should be an incentive to innovate and one of the strongest incentives to innovate is you can present your product to consumers. And that is what is at stake here — it has become too difficult for other products, other app stores to present their apps to the consumer.”
The EC probe of Android remains in train. In that instance Google faces a far stiffer fine — of up to 10 per cent of its annual turnover (which is close to $75BN) — should the Commission uphold the antitrust charges against it.
Google’s Android OS remains hugely dominant, with an around 80 per cent share of the global smartphone OS market — giving the company massive reach for its own brand apps and services pre-loaded onto Android handsets that include the popular Play store.
This post was updated with additional comment