Photographer: Andrey Rudakov/Bloomberg

Google Settles Russian Antitrust Case on Android Phones

  • Google to pay fine, end exclusivity on Android phones
  • Russian search engine Yandex may benefit from agreement

Alphabet Inc.’s Google settled its dispute with Russia’s antitrust watchdog in an agreement that opens the way for local search engine Yandex NV to be pre-installed on Android devices.

Google “will be obliged not to restrict pre-installation of any competing search engines and applications” on its Android operating system in Russia, the Federal Anti-Monopoly Service said on its website on Monday. The company will pay a fine of 438 million rubles ($7.8 million) and allow Android phone makers to pre-install third-party services such as Yandex, including on the first screen, as part of the settlement approved by Moscow District Arbitration Court, Aleksey Dotsenko, the antitrust regulator’s deputy head, told reporters.

Google will “no longer demand exclusivity of its applications on Android-based devices in Russia,” the FAS said. The settlement with the regulator and a separate commercial agreement with Yandex meet the interests of all parties and provide “additional opportunities to promote the Yandex search service in the Chrome browser,” Google said in a website statement.

The regulator ruled in October 2015 that Google violated anti-monopoly rules and should change agreements with mobile-device makers to allow them to pre-install third-party services. Google had been appealing the ruling prior to the settlement.

Google will develop an active “choice window” for the Chrome browser for devices currently on the market, so that users can choose their default search engine when they next update their system, according to the FAS’s statement. It will develop a Chrome widget for new devices within a few months to allow users to choose their preferred search engine on first use.

Yandex shares in New York jumped after the announcement and were 7 percent higher at $24.35 at 7:13 p.m. in Moscow. The company has about 55 percent market share in Russian search versus Google’s 40 percent, according to researcher LiveInternet. Its share is about 38 percent on Google’s Android, according to Yandex.

Yandex Chief Executive Officer Arkady Volozh compared the decision to Microsoft unbundling Internet Explorer from Windows in 2009. It should enable Yandex to reach commercial agreements with mobile-phone makers and expand its share of search on Android devices in Russia, he said.

Yandex’s share of the Russian search market has been declining on devices powered by Android. It won an antitrust case in Russia and filed a similar case in the European Union, joining complaints by Microsoft Corp.-backed FairSearch lobby group, ad-blocker Disconnect and independent applications-store Aptoide.

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