Moscow – Today, the Federal Antimonopoly Service (FAS) of Russia accused Google (NASDAQ: GOOG) of breaking local antitrust laws. The Russian agency issued a statement on Monday saying that the American company was abusing its dominant market position, although the Russians emphasized the fact that it was not an unfair competition practices accusation.
FAS explained that Google abused its dominant market current position with the company’s operating system, Android. According to the regulators, Google was using this tool to their own benefits, leaving their rivals out of the picture, as is the case of Yandex, which is a Russian Internet company that operates the largest search engine in the country with a huge amount of the market share in Russia. Yandex, of course, is Google’s rival.
Yandex has already complained about Google’s ways earlier this year. The Russian company claimed that the competition was demanding manufacturers to pre-install its offerings in the Google Play platform. The company requested FAS to force Google to unlink its offerings from the Android operating system and their download platform.
FAS, started its investigation after Yandex’s allegations and determined that Google indeed was unfairly bundling the services offered by themselves, such as, Google Play Music, Google Translate, Google Maps, to name a few. Services that Yandex and other competitors also provide but have been overshadowed due to Google’s alleged dominant market position.
“We hope that the antitrust decision will help to restore competition in the market”, Yandex said in an emailed comment, as reported Salt Lake Tribune.. “While the European Commission has already started a preliminary probe into similar practices, Russia is the first jurisdiction to recognize these practices as uncompetitive.”
Konstantin Belov, an analyst at UralSib Capital, explained that these accusations against Google can benefit Yandex, due to the fact that they have been losing market share as smartphones powered by Google’s Android gained popularity. “A lot of users have been using Google services by default, and Yandex may get a chance to win them back.”
However, Yandex still possess more than 50 percent of the market shares in Russian online search, according to industry statistics. After the accusation, Yandex’s share price climbed more than 8 percent.
On Monday, Google refused to comment on the FAS antitrust accusation. The company told Business Insider “We haven’t yet received the ruling. When we do, we will study it and determine our next steps.” Russian’s competitor will respond to these allegations during a period of 10 days. If Google appeals but the allegations remains the same, the american company may be compelled to change the services included in its Android operating system, also, they are exposed to face potential fines.
Source: The New York Times