Why Google's Android app strategy could lead to sanctions in Russia

On Monday, Russia's antitrust watchdog announced that the search engine giant has until Nov. 18 to stop blocking competing search engines from working on devices with Google's Android operating system.

Maxim Zmeyev/Reuters
People walk outside the headquarters of Yandex a Russian search engine company in Moscow, on Sept. 14. Russia's antitrust watchdog said on Monday that Google could face stiff fines for abusing its dominance of the search engine market, preventing rivals like Yandex from competing. The company must change its practices by Nov. 18, the regulator said.

In Russia, Google’s practice of bundling its own apps on Android devices has come under attack by rival search engines, who say the company is abusing its position to gain more users in the country.

Now, the country’s antitrust watchdog has stepped in, announcing on Monday that the search engine giant could face the prospect of hefty fines and other sanctions if it does not change its practices by Nov. 18.

“To restore competition on the market, Google should amend agreements with mobile-device producers within a month and exclude the anticompetitive clauses that limit installment of apps and services by other developers,” Russia's Federal Antimonopoly Service said in a statement, the Wall Street Journal reports.

The agency also said it had launched an administrative case against Google, meaning the company could be forced to pay a fine of up to 15 percent of the revenue generated last year from sales of the pre-loaded apps if it is found guilty.

In September, Google was found guilty of violating anti-trust rules in Russia, but the regulator’s decision to set a timeline for changing the company’s practices marks a more definitive step in cracking down against the California-based search engine giant.

The decision is a win for Yandex NV, a Russia search engine that is Google’s chief competitor in the country. The company, which filed the antitrust complaint alleging Google’s bundling has harmed “fair competition,” has become the country’s leading search engine, according to Reuters.

“Our goal is to return fair play to the market – when apps are preinstalled on mobile devices based on how good or how popular they are rather than due to restrictions imposed by the owner of the operating system,” Yandex said in a statement, CNBC reports.

Google’s aggressive approach to promoting its own products has long proved controversial, but whether the approach constitutes an anticompetitive practice is still up for debate. In April, regulators in Europe charged the company with promoting its own shopping search service over that of competitors earlier this year.

But in South Korea, for example, a 2013 investigation into requirements that phone companies using Android load Google’s search engine found that the process didn’t violate Korean antitrust laws.

The company’s bundling proved more controversial in Russia, where device manufacturers told Yandex they were unable to pre-load apps made by the local company and were instead forced to use Google apps instead, prompting the company to file an antitrust complaint.

Google's Russian office said in a statement that it would study the regulators’ full ruling before taking further action. “Device makers are free to use Android with or without Google applications,” a spokeswoman told the Journal, “ and consumers have complete freedom to use rival application.”

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