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Russian Court Finds Google Guilty Of Using Its Dominant Position To Sidestep Anti-Monopoly Laws

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Google has just suffered a major setback that threatens some of its privileges, gained as the Android platform provider, in the whole of Europe. The company has lost an anti-monopoly appeal in Russia and has consequently, been found guilty of breaking anti-competition legislation.

The case revolves around Google’s convoluted policy with regards to its Gmail, Search, Play and other in-built applications, on the Android platform. The companies policy are of such a nature that manufacturers don’t really have much of a say in whether or not their devices come with these applications pre-installed.

While Google does not force manufacturers to integrate its applications with their devices, and in theory, they are free to use Android without any of its apps installed, the reality is a bit twisted. Google’s policy states that, if a manufacturer wants to offer one of the aforementioned services, they have to offer them all. So it’s a either offer all or you get none kind of thing.

Needless to say, with Google Play — the largest repository of Android applications — and the like at stake, manufacturers usually play nice and ship their phone with a whole bunch of Google Apps pre-installed, not allowing even the shadow of a competition.

Russia’s largest search engine Yandex decided that it had enough of it and lodged a complaint with the Federal Antimonopoly Service (FAS). The complaint was also prompted by the fact that Yandex, which sells its own devices in Russia, was forced to ship its devices with the Google search pre-installed.

The FAS Russia deemed Google’s actions in violation of anti-monopoly laws and asked it to eliminate the discrepancies by November, 18th, 2015. The Company wasn’t willing to  simply cave in and appealed to the Arbitration Court.

According to Moscow Arbitration Court, which decided to uphold the FAS’s decision,

The Moscow Arbitration Court found legal the decision of the Federal Antimonopoly Service (the FAS Russia) on case on Google’s abuse of dominance on the market of pre-installed app stores on the Android OS localized for the Russian Federation.

So, Google is found guilty of using its considerable dominance to tilt the table in its favour. While it will be up to the court to order the correctional measures it seems fit, the company may just have to change its policy towards the bundling of its apps.

Speaking on the topic to Venturebeat, a Yandex spokesperson said,

After careful consideration of all the facts in the case against Google’s anti-competitive practices, the court has upheld FAS’s judgement. We are satisfied with the court’s decision to uphold FAS’s judgement in the case against Google.

Meanwhile, the search giant is probably hoping that the case doesn’t set a precedent for other countries and regions. In Europe, the company finds itself facing the European Union over similar charges, and is also accused of biasing search results in its favour. The Union had also formally accused Google of pushing its own shopping service, which failed to kick off though, last year.

It’s relationship with the individual Governments is none too smooth either and the company finds itself running into trouble, all too often.

The company was also accused of indulging into lobbying from various quarters, including a high-profile Inquiry by the Guardian.

Some of the initial conclusions reached by the EU were as follows:

Google systematically positions and prominently displays it’s comparison shopping service in its general search results pages,irrespective of its merits.

It does not apply to its own comparison shopping service the system of penalties, which it applies to other comparison shopping services on the basis of defined parameters, and which can lead to the lowering of the rank in which they appear in Google’s general search results pages.

As a result of Google’s systematic favouring of its subsequent comparison shopping services”Google Product Search” and “Google Shopping”, both experienced higher rates of growth, to the detriment of rival comparison shopping services.

Google’s conduct has a negative impact on consumers and innovation. It means that users do not necessarily see the most relevant comparison shopping results in response to their queries, and that incentives to innovate from rivals are lowered as they know that however good their product, they will not benefit from the same prominence as Google’s product.

A long, long list. And Google may just find things becoming very uncomfortable, including the loss of its hitherto enjoyed dominant position, if things continue as it is. A major policy change is what may be needed to bring things back on track, for the software giant.

Meanwhile the Russian courts decision has certainly shown us which way the winds are likely to blow.


 

A bibliophile and a business enthusiast.

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