Tuesday, September 15, 2015

Google will punished for Android – Vedomosti

The Federal Antimonopoly Service (FAS) has come to the conclusion that the US Google Inc. Irish and her “daughter» Google Ireland violated the first part of Art. 10 of the Law “On Protection of Competition” – the abuse of a dominant market position. This “Vedomosti” said the head of Department of Information Technology, FAS Vladimir Kudryavtsev. According to him, the service decided that Google restricts competition in the segment of online shopping application for the operating system Android. As the developer of the system, she agreed to handset manufacturers set them access to its store Google Play, only on certain conditions: in particular, the manufacturers were required to provide other products Google – for example, an Internet search – a priority in their devices.

A complaint filed in the FAS at the beginning of 2015 “Yandex”.

Initially suspected Antimonopoly Service Google in two violations – abuse of dominant position and unfair competition. But the production of art. 14 (unfair competition) FAS stopped, Kudryavtsev said yesterday, “Vedomosti”. In fact, this article is “absorbed” by the second, he explained: unfair competition could not be without a dominant position on the market. In the next 10 days, FAS Google will issue an order to stop infringement, said Kudryavtsev.

Even if Google will follow this requirement, by law it is obliged to pay a fine of 1-15% of the turnover on the market where there was a violation.

Investors satisfied

12,2% to as much rebounded quotes Yandex NV on the NASDAQ after the information on the recognition of Google intruder and reached $ 12.65 per share. At 20.00 MSK growth corrected to 6.8% – $ 12.05 per share

FAS there are two ways to punish Google – or be fined a Russian legal entity (LLC “Google” ) or request payment data Russians on Google Play at the National payment card system (NBTS), through which the payments are now being MasterCard, Visa, says founder Liveinternet German Klimenko. In any case, it will be quite a large sum, he said. In this case concerned violations of the app store, so that to impose a fine on the Russian OOO “Google” (sung purely marketing functions) can not be – should be very fine Google Inc. and Google Ireland, said Kudryavtsev. How Google earns on app store in Russia, the FAS will be considered on the basis of confidential information provided by the company itself, he adds.

Publicly, Google did not disclose how much it earns app store. Predpravleniya investment company “Finam” Vladislav Kochetkov Google Play revenue estimates in Russia at $ 65-70 million. It is based on the evaluation of the global Google Play store revenues of $ 3 billion and the number of Russian users of devices running Android. If so, Google can pay to the Russian treasury a maximum of $ 9,8-10,5 million.

FAS filed a case against Google in March this year. “Yandex” has complained that US rival forces the manufacturers of mobile devices running Android abandon the preset applications, competing with the products of the Google, including the application “Yandex”. This is indirectly confirmed by the fact that just three manufacturers Android-backgrounds – Fly, Explay and Prestigio – almost at the same time refused to set their devices to services “Yandex”.

All of them referred to the terms of contracts with Google. The American company firmly in response to that smartphone users are free to download anyone’s application.

Yesterday, Google spokesman said only that the company will study the decision of FAS, when it receives it.

«Yandex” glad the decision of the FAS, said its representative Asya Melkumova. The subject of the investigation were, in her words, just a few steps Google: first, an American company linked the right of access products to Google Play with the sale of his package of applications Google Mobile Services (GMS), and secondly, required to preset a Google search by default and, Third, I insisted on the first screen of smartphones in the preferential order placed application Google. The manufacturer could not get Google Play only if all three conditions, reminds Melkumova. The trial confirmed that an agreement with the producers of Google applications banned preset competitors, she says, and Google does not deny that “Yandex” “directly specified in these agreements.” A similar investigation against Google began and the European Commission, but Russia was the first country in the world to recognize the non-competitive practices, highlights Melkumova.

For the “Yandex” it is important to gain a foothold in smartphones and tablets running Android – most popular operating systems for mobile devices in Russia (its share exceeds 80%, according to “Yandex”). In the last few years the share of search “Yandex” dropped just as the growing popularity of Android: Russian search engine keeps a good position on the desktop and on mobile devices is dominated by Google. According to TNS, in July 2015 in Russian cities with a population over 700 000 inhabitants, Google has been the most popular service on mobile devices, and “Yandex” held the third place. Among desktop users, “Yandex” is still the first, and Google – the fourth.

Google can easily pay the fine, the analyst “Opening Capital” Alexander Vengranovich. For Google, more importantly, whether it is to bypass the decision of the FAS and to keep the status quo in the Russian market. If not, the “Yandex” has a chance to restore its stake to the level of a year ago (62%), because usually people use the search, which is installed on the device by default, considers Vengranovich. Analysts at investment banks have been written in the report that one of the main threats to the business of “Yandex” – the loss of market share, which does not slow down the impact on the company’s revenue.


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