Russian search engine complains to Google

The competition between Yandex and Google for the Russian Internet search market is reaching a new level. Yandex asks the FAS to figure out why Google's Android mobile platform is imposing its services on smartphone and tablet manufacturers, including Explay, Fly and Prestigio. If the FAS agrees with these arguments, Google may face a fine of 1% to 15% of turnover in the operating systems market.

Photo: Anton Belitsky, Kommersant / buy photo

Yesterday, Yandex announced that it had filed a complaint against Google with the FAS. Yandex's statement regarding Google's abuse of its dominant position in the market of mobile operating systems was received by the antimonopoly agency, Vladimir Kudryavtsev, head of the information technology department of the FAS, told Kommersant. According to him, Yandex saw restrictions on competition in Google’s actions, when the American company prevented the manufacturers Explay, Fly and Prestigio from installing Yandex services (maps, search) that work “by default.” If a smartphone has “default” services, then a person prefers them to those services that need to be downloaded, says Vladimir Kudryavtsev. According to him, the FAS will also check whether Google’s actions affected other market participants.

Last year, Yandex reported that Explay, Fly and Prestigio refused to promote its mobile services in 2014, while simultaneously signing an agreement with Google that prohibited the installation of software “by default” from competing manufacturers.

Android phones priced up to 5 thousand are becoming more and more popular; in Russia they occupy 45% of the market. At the same time, the total share of budget Android tablets (up to 10 thousand rubles) is 76%. In particular, Explay tablets, according to Svyaznoy Group of Companies, increased their market share fourfold over the three quarters of 2014, to 11%. Prestigio tablets occupied 8% of the tablet market. At the same time, Fly doubled its share of the smartphone market, which amounted to 11% (Euroset data).

Yandex explained yesterday that Google limited access to the Google Play application store, manufacturers could connect to it only on Google’s terms, Yandex clarified. The Russian Internet company believes that Google needs to separate Android from search and other services. “Manufacturers should have a choice... Installing services for users should not be associated with the provision of Google Mobile Services (a package of mobile applications from Google, which includes maps, Gmail, Chrome browser, YouTube, etc. - “Kommersant” ) and Google Play,” says the Yandex press release. “Users always have a choice of which applications and services to use on Android devices,” retorts Google spokesperson Alla Zabrovskaya.

Today, Android is the leading mobile operating system, accounting for more than 84% of sales of all devices in the world and 86% in Russia (Yandex data). And the popularity of Google products - Android devices, the Chrome browser - is only growing. Over the past year, Google increased about 6 percentage points (pp) in the Russian search market, while Yandex lost about 3 pp, the Raiffeisen Centrobank report said. According to LiveInternet data as of February 18, Yandex's share was 52.5%, Google - 38.2%.

Google often prohibits device manufacturers from putting any product that competes with it on the first page when loading a mobile system, says a top manager of a Russian Internet company. Such facts were also mentioned in reports about the antitrust investigation against Google, which is currently underway in the EU. It is logical that Yandex protects its interests, says Igor Ashmanov, president of the Ashmanov and Partners company.

“Google demands exclusivity, which is unacceptable from a legal point of view. In fact, this is a restriction of competition,” lawyer and head of ETilling Company Ekaterina Tilling told Kommersant. She does not rule out that the exclusivity clause in the agreement between Google and its counterparties may be invalidated. “Barriers are created to enter the market for Google’s competitors or the imposition of unfavorable conditions on counterparties who, under other conditions, would prefer to use competitors’ products,” believes Radmila Nikitina, head of the antitrust law group at YUST. “Google’s aggressive business practices” may be considered an abuse of a dominant position, and in this case, Google will face a fine of 1% to 15% of turnover in the operating systems market, the lawyer believes. Google does not disclose the amount of revenue in Russia. According to SPARK-Interfax, the revenue of its Russian subsidiary Google LLC in 2013 amounted to 14.7 billion rubles, net profit - 1.49 billion rubles.

Roman Rozhkov, Vladislav Novy

Yandex called FAS