Russian Authority Fines Google $6.8M Over Android Bundling

By Jaikumar Vijayan  |  Posted 2016-08-11 Print this article Print
Google fine

Following a complaint by rival search engine company Yandex, Russia's Federal Antimonopoly Service rules that Google violated Russia's fair competition laws.

Russia's Federal Antimonopoly Service (FAS) has fined Google the equivalent of $6.8 million for violating the country's fair competition laws.

The fine comes about one year after the FAS opened its investigation against Google and represents mixed news for the company. One the one hand, the penalty suggests that regulators in the many countries where Google's business practices face scrutiny are moving from merely warning the company to actively taking action against it.

At the same time though, the actual amount of the fine itself is so small for a company as wealthy as Google that it is more a symbolic value than anything else.

A Google spokesman said the company has received notice of the fine from the FAS and will analyze it before deciding on the next steps. "In the meantime, we continue to talk to all invested parties to help consumers, device manufacturers and developers thrive on Android in Russia."

The FAS, which is responsible for enforcing Russia's anti-monopoly laws, opened its case against Google last September at the behest of Russian search engine company Yandex. In a complaint, Yandex claimed that Google's Android bundling policies effectively block third-party application developers from having their products preinstalled on Android handsets.

Yandex said that Android handset makers that want to preinstall Google Play on their devices are also mandated, under the bundling requirement, to install other Google apps like Search and Maps. The Russian vendor has claimed the policy prevents others, like itself, from having an opportunity to get valuable real estate on Android handsets.

Last October, the FAS ruled that Google had indeed violated Russia's fair competition laws and ordered the company to discard its Android application bundling requirements. It held that Google had abused its market dominance to force handset makers into preinstalling apps on their devices and gave Google one month to implement the change or face stiff fines.

Google appealed that decision with the Moscow Arbitration Court. The court earlier this year rejected the appeal. The administrative court agreed with the FAS finding and said that it fully supported the decision requiring Google to discard the Android app bundling requirement.

This week's fine is a relatively small one for Google and is unlikely by itself to be much of a deterrent, if that was the FAS' goal. But it highlights the growing impatience with Google's business practices in several countries where rivals have accused the Internet giant of abusing its market dominance.

Google faces its biggest legal challenges in Europe, where regulators have opened up three separate investigations against it.

Margrethe Vestager, the European Union commissioner for competition, is currently investigating whether Google is abusing its dominance in the search market to play up the company's own comparison shopping sites in favor of rival sites.

As in Russia, Vestager's office also is examining whether Google's Android bundling requirements are preventing others from having their software products installed on Android devices.

The third investigation, opened in June, involves Adwords, Google's online advertising platform. EU investigators want to know, among other thing, whether Google is preventing companies using Adwords from using similar services being offered by rivals.

In addition, authorities in some EU countries are investigating Google for potential underpayment of taxes. France's Ministry of Finance, for instance, is reportedly looking to collect $1.8 billion in back taxes from the company. Google settled a similar dispute in the UK for around $143 million.

Google has consistently denied that its business practices violate anti-competition rules, arguing instead that its services have actually helped rivals grow their businesses.


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