Google Alphabet Inc. company has fallen foul of Russian Federal Antimonopoly Service (FAS) over reportedly making retailers install its search engine and apps suite on android mobile phones and tablets for the Russian market. The result is 438 million rubles ($6.75 million) fine!
As an IT Support Company in Hertfordshire we know that some markets such as the communications and technology markets can be fiercely competitive. In essence the judgement by the FAS means that Google has been accused of taking advantage of its dominant market position and has been seen as acting in a way that appears to be anti competitive.
Back in September 2015 Russia’s most widely used search engine Yandex NV made a complaint that Google had been automatically pre-loading its apps and services onto new android handsets while at the same time not allowing other 3rd party services to be pre-installed. Yandex NV was one of the 3rd party services that felt it had unfairly lost out on a potentially lucrative opportunity and a chance to gain market share. This resulted of course in the judgement against Google this year, and the large fine for Alphabet Inc.
The $6.75 million fine imposed by the FAS is reported to have been arrived at by calculating somewhere between 1 and 15% of Google’s revenue for 2014. In this case, the revenue was based on that of Google Play’s domestic sales.
The FAS is reported to have given Google 2 months to pay.
Help Market Development
As an IT Support Company in Hertfordshire we know big and how competitive the mobile software market has become in recent years. Yelena Zayeva, the head of the department for regulating communications and IT in the FAS is reported to have said that the move to fine Google should be a step towards helping the development of Russia’s mobile software market which should in turn have a positive effect for consumers.
Good For Android and For Competition?
Commentators have pointed out however that the move to stop Google from pre-loading its services onto android handsets could only really help natural competition if other big competitors such as Moto Fit and Samsung Pay are subject to the same scrutiny and rules of engagement.
It is also thought by some that the move to stop Google in this case will not really benefit the development and continuity of the Android platform.
What Does This Mean For Your Business?
Although the move by the FAS in Russia is unlikely to have much of an effect on businesses in the UK it is a reminder of the dominance of companies such as Google and Microsoft in our own market, which is not necessarily a bad thing for us a consumers as long as the products and services they provide are advanced, effective, compatible and affordable enough to help our businesses to reach our aims.