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Russia competition watchdog fines Google $6.8m over Android

As Google faces a fine of around $3bn for anti-competitive practices in Europe, Russian authorities have ordered the internet giant to pay $6.8m for abusing its dominant position with Android device makers

The Russian Federal Anti-Monopoly Service has fined Google $6.8m for forcing smartphone makers to pre-install Google apps on their Android devices.

Google lost an appeal against the agency’s finding in March 2016. The fine was calculated as a share of Google Play's domestic sales for 2014.

According to local rules, fines must be 1% to 15% of an offending company’s annual revenue, the Russian watchdog told Bloomberg.

In 2015, the agency ruled that Google’s actions were illegal because forcing manufacturers to pre-install its search, mapping and other apps, gave it an unfair advantage over competitors.

The agency’s ruling followed an investigation after complaints by Russian search engine company Yandex, which is Google’s biggest competitor in the country.

The fine comes on top of the Russian agency ordering Google to end deals with suppliers that restrict what third-party apps they can pre-install.

New appeal planned

Google plans another appeal on 16 August against the agency’s findings that the internet giant is abusing its market dominance through Android, according to the Financial Times.

Google faced similar complaints in April 2016 from the European Commission (EC) over restrictive contracts requiring phone manufacturers to install Google apps on new phones.

Read more about Google’s anti-trust case

  • Pre-installing Google Search and Play on devices is anti-competitive and limits consumer choice, claims EC
  • The European Commission gives backing to new proposals from Google, putting to rest accusations of anti-competitive behaviour on company’s search sites
  • Google has submitted several proposals in response to concerns by European competition authorities in an attempt to avoid punitive fines

An EC investigation also found that Google pays manufacturers and telecom operators a share of ad revenue if they agree to keep its search engine as a default option on the devices.

The EC said pre-installing and setting Google as the default, or exclusive, search service on most Android devices sold in Europe closed off ways for rival search engines to access the market, via competing mobile browsers and operating systems.

Complaints in Europe

The complaints around Google’s abuse of its dominant position in Europe on the Android platform are part of a raft of complaints by the EC over the company’s business practices.

The EC is pressing Google to change some of its business practices relating to restrictions to rival third-party websites from displaying search ads and ranking its own services higher than rivals in search results.

The EC started investigating Google’s practices in November 2010, notifying the company in March 2013 of concerns that the US firm had abused its dominance of the search market. Google reportedly accounts for 90% of the European Union (EU) search market.

After nearly six years of trying to settle the case, the EC is expected to issue a fine of around €3bn in 2016, but has been in the process of finalising its case for months.

As well as the fine, Google is expected to be banned from manipulating search results to favour its services over competitors', but could appeal against both in the European Court of Justice.

Korean probe

Meanwhile, The Korea Fair Trade Commission is investigating Google’s advertising policy in response to a complaint by Korean advertising agents in 2014 that Google had not paid it commissions for online advertising since 2012, according to the Financial Times.

Local media reports have also suggested the Google is under investigation over alleged abuse of its Android smartphone operating system’s dominance.

Android has a strong presence in the South Korean smartphone market, but Google is a minor player in the country’s search market, with a  share of less than 10%.

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