FAS Russia Reaches Settlement with Google

On April 17, 2017, the two-year legal process between the Federal Antimonopoly Service and Google ended up with a voluntary settlement in the Moscow District Court of Arbitration. The settlement will help eliminate the violations of the antimonopoly legislation previously detected by the FAS Russia and will ensure competition on markets of mobile applications, especially mobile search.

Let us remind that as far back as in September 2015 the FAS Russia established that Google had violated Part 1 Article 10 of the Federal Law “On Protection of Competition” by abusing its market dominance.

The FAS Russia found violations in the Google’s actions which resulted in prohibition of pre-installation of other developers’ competing applications. As a result, due to refusals in regards to other manufacturers of mobile devices, pre-installation of mobile applications, which is the most efficient app distribution channel, was fully reserved by Google.

Additionally, the violation included provision of Google’s counterparties (mobile devices manufacturers) with access to Google Play application store only subject to certain conditions that the manufacturers of mobile devices in the Russian Federation had to fulfill. These conditions comprised mandatory pre-installation of other Google apps together with Google Play, their preferential placement on the devices’ home screen as well as mandatory installment of the Google search engine as default.

To restore competition, the FAS Russia issued a prescription to Google in order to require the company to remove anti-competitive restrictions from its agreements with manufacturers. This included the exclusivity and priority placement of Google apps as well as the provisions limiting installation of other developers’ apps and services.

Courts of two levels upheld the validity of the FAS Russia’s decision.

The FAS Russia imposed a fine on Google for violating Article 10 of the Federal Law “On Protection of Competition” in the amount of 438,067,400 roubles.

Google then proposed to the FAS Russia to reach a settlement. The FAS Russia, driven by the necessity to eliminate consequences of the violation and to restore competition in the market, agreed to sign the settlement agreement.

According to the terms of the settlement agreement, Google will no longer demand exclusivity of its applications on Android-based devices in Russia; Google will be obliged not to restrict pre-installation of any competing search engines and applications (including on the default home screen); Google will refrain from stimulating pre-installation of the Google search as the only general search engine; Google will no longer enforce the parts of the previously signed agreements that contradict to the terms of the settlement; finally, Google will be committed to securing the rights of the third parties to include their search engines into the choice window.

For the devices that are currently circulating on the Russian market, Google will develop an active “choice window” for the Chrome browser which at the time of the next update will provide the user with the opportunity to choose their default search engine.

Within a few months, Google will develop for new devices a new Chrome widget that will replace the standard Google search widget on the home screen. This will allow end users of the devices based on the Android OS with the GMS package to see the new “choice screen” at the first launch of the new Chrome widget. This choice screen enables users to choose Yandex search or Google search or any other search engine of those developers who will sign a commercial agreement on their inclusion to the choice screen.

Within 60 days after the approval of the settlement agreement by court, all the interested Russian search engines will be able to address Google for discussing potential conditions of their inclusion to the choice screen next year.

This makes the applications pre-installation channel on mobile devices open for application developers who will get equal rights and opportunities to access the devices on the territory of the Russian Federation.

Apart from restoring conditions for competition in the market of mobile applications, the implementation of the settlement will enable consumers to buy devices with the software that better corresponds to their expectations.

Users will be able to change settings at any time and choose the default search engine which suits their needs.

At the same time, Google will by no means limit or impede pre-installation of other developers’ applications on the users’ devices.

“Implementation of the settlement’s terms will be an effective means to secure competition between developers of mobile applications. We managed to find a balance between the necessity to develop the Android ecosystem and interests of third-party developers for promoting their mobile applications and services on Android-based devices. The settlement’s execution will have a positive effect on the market as a whole, while giving developers additional options for promoting their products,” – summarized Igor Artemiev, Head of the FAS Russia.