Google Found Guilty of Stifling Russian Competition

Google has been found guilty of preventing competition in Russia, forcing vendors to preload Android devices with Google apps and banning them from installing apps from competitors. What could this mean for the two search engines’ competition?

Yandex filed an anti-trust campaign back in February, accusing Google of illegally trying to squeeze out its local competition. In addition to preloading its apps, Google was accused of giving them preferential placements on the first page. Yandex sites accounted for more than 71 million views in Russia, compared with Google’s 66.5 million views, according to comScore research conducted in June. But while Yandex still has the edge, the overwhelming majority of Russian smartphones are powered by Android, limiting the company’s ability to compete in the mobile market.

According to Richi Williams, chief executive of Fearch, a U.K. search engine that defines itself as “where social meets search,” the rivalry between Google and Yandex is a natural byproduct of business.

“Yandex complaining over Android is just a business complaint. Yandex can go out and create its own operating system, so what’s stopping it from doing so and building up a following that way, and then providing search through it?” Williams asks. “At the end of the day, you can’t argue or do anything about a sandwich or coffee shop being better placed on the shopping high street. All you can do is focus on what you’re good at, and try and attract customers and users naturally.”

Since Google was found guilty yesterday, Yandex’s shares have jumped more than 8 percent. Could the anti-trust complaints be an attempt to push Google out of the country and even the playing field? Steven Dunston, director of marketing technology at tax compliance software company Avalara, thinks it’s possible.

“To the extent that the West gets pushed out of Russia, I could see Google getting pushed out,” Dunston says. “I think that’s going to be out of Google’s control – the larger political climate is going to affect that pretty similarly. I think the whole monopoly gets tricky, especially when you’re global because there are different laws in different parts of the world which make it difficult to monopolize on.”

However, the monopoly is exactly why it’s so difficult for Yandex to be a true competitor. Dunston points out that beyond search, Google has its whole suite of products, such as AdWords and Analytics, in addition to Android.

“If [Yandex] wants to focus on desktop search, it could keep winning there,” Dunston says. “The world is moving to mobile-first and Google has such an incredible advantage with Android – it’ll be tough to compete.”

In its official statement, Yandex referenced the famous Microsoft case from 2009, in which the tech giant violated anti-trust European Union rules by selling the Internet Explorer browser alongside the Windows operating system.

“We welcome the positive ruling of the Federal Antimonopoly Service, which took up this complex case and, having examined the evidence, recognized a violation on the part of Google […] The investigation confirmed the existence of agreements on prohibition of pre-installation of competitors’ apps – in part, it was not denied that Yandex was specified in these agreements,” said Yandex.

Regarding Google’s verdict, the search giant can still appeal the ruling. If the decision holds, the company may be forced to comply with Russia’s competition rules, changing the services included in Android, or risk paying 15 percent of its Russian income. Details about the decision will be publicized within the next 10 days.

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