Google has finally reached a settlement in its long-standing anti-monopoly battle with local competitor Yandex and the Federal Antimonopoly Service (FAS) in Russia.
The crux of the complaint, which was initiated by Russian internet giant Yandex, was that Google was abusing its dominant market position and was breaking anti-competition legislation. Essentially, the argument was that Google was preventing third-party companies from offering competing services on Android by forcing manufacturers to bundle some Google apps, including Gmail, Google Search, and Google Play, on the devices.
While it’s true that manufacturers are free to use Android without the aforementioned apps installed, as Amazon does with the Kindle Fire tablet, if a phone company wishes to offer one Google service, it has to offer them all. For example, if a handset maker wanted to offer users the Google Play app store, they would also have to offer Google Maps, Gmail, and Google Search. And it was the latter that irked Yandex, given that it runs its own popular search service in Russia.
In March of last year, the Moscow Arbitration court upheld a previous ruling from FAS that found Google was indeed abusing its market position. Google was later fined almost $7 million and was ordered to change its agreement with device makers.
Now Google said it has entered a commercial agreement with Yandex to “promote” Yandex in Chrome — a deal that has been rubberstamped by the FAS. As part of the deal, Google will no longer “demand exclusivity of its applications on Android-based devices in Russia,” according to a separate statement issued by the FAS. It said:
Google will be obliged not to restrict pre-installation of any competing search engines and applications (including on the default home screen); Google will refrain from stimulating pre-installation of the Google search as the only general search engine; Google will no longer enforce the parts of the previously signed agreements that contradict to the terms of the settlement; finally, Google will be committed to securing the rights of the third parties to include their search engines into the choice window.
Moving forward, the FAS says that Google will build an “active choice” window for its Chrome browser that will offer existing Android users in Russia the choice to select a different default search engine. This will be deployed through an over-the-air (OTA) software update. Additionally, Google will build a new Chrome widget to replace the existing Google Search widget that millions of users around the world will be familiar with. When Chrome is launched for the first time, users will see an option to choose Yandex search or Google search. Other search engine providers who enter into a commercial agreement with Google will also be made available here.
In an open letter posted by its CEO, Arkady Volozh, Yandex calls the agreement a “celebration of choice.” He said:
As one of the largest internet companies in Europe, and the leading search and mobile applications provider in Russia, access to platforms is critically important for Yandex. Technology platforms make it possible for us (as well as other companies) to continue a rapid pace of innovation.
But this is only possible if those platforms are sufficiently open to foster competition by allowing access to third-party developers. We are excited to have reached a solution that restores these necessary elements to ensure a more dynamic and competitive ecosystem.
This is a major development for Android in Russia, but it could also spill out into other regions. Google’s Android anticompetition woes extend into the European Union (EU) with the European Commission (EC) also probing the internet giant on similar grounds. That Russia has managed to get Google to commit to opening Android up could set a precedent and give other legislative bodies more confidence in their push against Google.