Google Told by Russian Regulator to Unbundle Android Search

  • Google told to amend agreements with mobile-device makers
  • Yandex shares rise as much as 13 percent in U.S. trading

Russia’s antitrust regulator has ordered Google Inc. to amend agreements with smartphone producers that it said disadvantage third-party applications on devices running the Android operating system.

Mountain View, California-based Google is abusing its market dominance through Android, the regulator ruled last month after a complaint from local search engine provider Yandex NV, which has been losing market share to its U.S. rival on mobile devices.

Google has allowed Android-phone producers to use its application store Google Play on the condition that they also pre-install services from the company, including search, and prioritize those icons on screens, the Russian regulator said Sept. 14. Yandex has said Android’s default options push mobile users to Google services, limiting consumers’ ability to choose such services from Yandex or other vendors.

“To restore competition on the market, Google should amend agreements with mobile-device producers within a month and exclude the anti-competitive clauses,” Russia’s Federal Anti-Monopoly Service said in a statement on its Website on Monday.

Yandex shares rose as much as 13 percent in U.S. trading and were up 7.3 percent at $12.17 at 12:40 pm in New York.

“We hope that the FAS’s ruling will help to restore fair competition on the market, but to what extent will depend on how this ruling will be executed,” Yandex said in an e-mailed statement.

Google’s Russian press office declined to comment on the regulator’s demands.

Yandex’s share in Russian search fell to 50 percent in August versus 54 percent at the start of 2014, while Google’s share rose to almost 42 percent from 34 percent, according to LiveInternet.ru.

Google may also face a fine of 1 percent to 15 percent of the revenue from the services where the violation occurred, according to the regulator.

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