AH 2015 play Playstore LOGO-97

Google To Face The Music From FAS Over Pre-Installed Apps?

September 14, 2015 - Written By Matthias Tan

In February, Yandex filed a complaint against Google with the FAS (Federal Antimonopoly Service of the Russian Federation) over the practice of bundling apps from Google Mobile Services via the Google Play Store, requiring a mandatory pre-installation of the Google Search as the default search engine and deliberately providing its apps an advantageous position on the front screens of mobile devices. For a bit of background info, Yandex is an internet company which operates the largest search engine in Russia and it considers Google a rival, even though it is leading the competition in the country. The catalyst of this competition is probably due to the growing amount of consumers who are switching to Android-based handsets. These handsets have pre-loaded Google apps. These apps directly clash with the ones of Yandex in terms of function. Yandex is definitely not fond of the competition.

On Monday, the FAS issued a statement saying that Google has been violating the law by misusing its market position to pre-installing its apps on mobile devices (apparently, there is an agreement that makes it illegal for foreign companies to pre-install their apps). As a result of its violations, it could face fines that that can amount up to 15 percent of its 2014 earnings in the Russian market. Declining to comment on the particular revenue it will be penalizing, the statement says that this piece of information is a trade secret. After September 28, the FAS would come to a decision on the exact amount that Google has to pay. After paying the fine, Google must operate its business in a lawful manner and if the violations continue, Google would face more fines.

When approached for comment, Google Russia said that it would observe the situation and declined comment further on the matter. Google’s website shows global earnings of $66 billion but it does not provide a separate figure for the earnings in Russia or any financial information pertaining to the FAS ruling. Meanwhile, Yandex commented on the ruling saying, “The investigation confirmed the existence of agreements on prohibition of pre-installation of competitors’ apps,” As a result of the FAS ruling, shares in Yandex rose up to 9 percent and stabilized around 7 percent higher. To make things more gloomy for Google, the European Union is pursuing an antitrust case against Google Analysts at App Anne claim that during the second quarter of the year, Russia was Google’s No. 4 market in the world in the area of Google Play downloads.