Google's mandatory Android app-bundling breaks antitrust law, Russian rules

Russia looks to alter Google's contracts with OEMs for devices sold in the nation to open up Android to rivals.
Written by Liam Tung, Contributing Writer

Russia's antitrust regulator has charged Google with violating the nation's antimonopoly laws by requiring handset makers to pre-install key Google apps on Android smartphones.

The regulator's ruling comes after a short investigation prompted by a complaint from Google's Russian search rival Yandex in February, when it called on Russia's Federal Antimonopoly Service (FAS) to force Google to unbundle search and other apps from Android.

FAS said on Monday that Google had abused its market dominance and violated Russian law by requiring OEMs to pre-install the Google Play app store, Google apps, and Search on mobile devices. FAS added that Google's actions also resulted in vendors not pre-installing other applications.

Yandex had around 57 percent of Russia's search market in the second quarter of 2015, meaning Google's share of the search market is far lower in the country than in Europe, where it holds over 90 percent. However, mirroring the situation in parts of Europe, Android is by far the dominant mobile OS in Russia, and accounted for about 76 percent of all handset sales in the country in the quarter ending in July, according to Kantar WorldPanel figures.

Russia's ruling comes as Europe continues its own antitrust investigation into Google's practice of bundling apps with Android.

The FAS ruling follows Google's decision to close its engineering unit in Russia, reportedly prompted by the nation's new data protection laws, which require companies to process and store data locally.

Russia has also shown a keen interest in supporting alternatives to closed mobile operating systems, tapping Yandex and Finnish smartphone maker Jolla for ideas on how that could be done.

Deputy head of FAS Alexei Dotsenko said a full decision should be delivered within 10 working days, and will include a request for Google to change its contracts with mobile device makers.

"In particular, FAS can request to adjust contracts with vendors of mobile devices, excluding such clauses from the agreements that restrict installing applications and services of other developers of such devices," said Dotsenko.

FAS added that Google's violation of Russia's competition law could result in a fine of one to 1.5 percent of the income gained from selling goods in Russia.

"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... We believe the FAS's decision will serve to restore competition on the market," Yandex said.

A Google spokesperson said: "We haven't yet received the ruling. When we do we will study it and determine our next steps."

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