Russia began investigating Google for antitrust violations last year after the largest search engine in the country, Yandex, complained to authorities. It alleged that Google's promotion of its own services over alternatives (like Yandex) on Android was anti-competitive. Now, the Russian Federation Antimonopoly Service (FAS) has issued a $6.8 million fine against Google. Surely, this will bankrupt the company.
The fine is obviously a tiny amount of money for Google, which has $75 billion in annual revenue. The fine is based on a 15% cut of Google's 2014 revenue in Russia. Google says it is evaluating the ruling handed down by the FAS, and will decide on its next step. That probably won't include just paying the fine. Even though it's a small amount of money, it signifies that Russian authorities consider the way Google operates Android to be illegal. The company doesn't want to concede that point without an appeal.
At issue here is the agreement OEMs have to sign in order to gain an access to Google Play Services. Certain Google apps need to be included on devices and have to be set as the default. This irks Yandex, which would like to be given prominent placement on mobile devices. Of course, Android is open source and anyone is free to create a fork if they don't want to use Google's ecosystem. Of course, everyone wants access to the Play Store on Android.
Neither side is likely to back down. This might just be the start of monetary penalties in Russia. It could get very messy. They should just reconcile neatly
- Source:
- NYT
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