Google May Face Penalties in Russia for Violating Competition Rules

Google-Russia

Yandex, the largest internet search engine in Russia has filed charges against Google with Russia’s anti-monopoly agency (FAS), charging Google with violating competition laws and abusing its market position in the country.

FAS agrees that Google has indeed violated competition laws and abused its market position, and currently considering sanctions to be imposed against the global internet giant. The fine to be imposed on Google could be up to 15% of the revenue it made in Russian markets in 2014.

A local competitor with Google Inc., Yandex accused Google of pre-installing some applications on mobile devices in a manner that monopolizes the market and creates bias against Yandex.

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Although FAS would not yet disclose the exact amount Google earned in Russia for 2014, the internet giant may have to pay 15% of this and then amend its business model, or face stricter sanctions in the face of ongoing violations.

Google Russia would not comment on the decision, but said it will monitor the situation.

Yandex which had also filed a complaint with FAS in February against Google hailed the decision as good. The shares of Yandex rose on Monday to about 9% before stabilizing at 7%.

“We believe the FAS decision will serve to restore competition on the market,” Yandex said. “In addition, the investigation confirmed the existence of agreements on prohibition of pre-installation of competitors’ apps.”

The charges Yandex made against Google revealed that the latter bundled applications from Google Mobile Services with the Google Play Store, requiring pre-installation of the Google search engine as the default service, thereby enabling Google application icons to have a preferred position on the screen of consumers using mobile devices.

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Yandex is leading the search engine market in Russia, but its position has become threatened with the influx of Android mobile devices that come pre-loaded with Google products which compete to edge Yandex applications out of the market.

Google made a total $66 billion in 2014, but the exact amount it made in Russia has not been disclosed even though the FAS penalty might make it lose 15% of this. Analysts say Russia is Google’s no. 4 market in the world for second quarter of 2015 in the area of Google Play downloads.

Another anti-trust case is pending against Google in the European Union for abuse of market position and underhand monopolistic practices.

 

About the Author

Awwal Hassan
Awwal is a gifted writer and music composer. He is either scouring the internet for something interesting to dish out, or playing some tune on his guitar and new keyboard. And yes, he has a Diploma in Journalism. Wanna get in touch? Contact him at [email protected]

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