The ‘Google of Russia’ Wins as Google Loses Antitrust Probe

Google Inc. (NASDAQ: GOOGL) was found to have violated Russian antitrust laws by requiring that manufacturers pre-install its search and services on their devices. Yandex had complained earlier to Russia’s Federal Anti-Monopoly Service. It had requested that Google should be forced into unbundling its services from the Android operating system and the application platform in Google Play.

Yandex’s complaint was reported to be that Android’s default options pushed mobile Web users to Google’s own services rather than to other services. This included maps and search functions of Google, and Yandex said that the efforts of Google limited consumers’ choices on services from Yandex and others.

While 24/7 Wall St. has not tracked any rankings and ratings on Yandex in Russia and in other countries, outside reports showed that Yandex had been losing market share to Google.

The reality is this is more of a gain for Yandex than it is a major loss for Google. Many such rulings are appealed. Sometimes they remain in place, sometimes they are overturned. Yandex is believed to be more entrenched in Russia as “being more Russian,” but predicting how rulings and treatment will be in Russia is often hard to do on a historic view.

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There is also a potential question about whether Russia might just be favoring a local company over an American one. After all, it is not as if relations between the United States and Russia are on solid ground.

Yandex’s shares listed in New York traded up 6.9% to $12.05. It has a 52-week range of $9.94 to $31.59. Google shares closed down 0.4% at $623.24, against a 52-week range of $486.23 to $678.64.

Russia’s FAS said back on February 20:

On 20 February 2015, the Federal Antimonopoly Service (FAS Russia) opened proceedings against Google Inc. upon elements of violating the antimonopoly law. Earlier the Antimonopoly Service received a complaint from Yandex about anticompetitive actions of Google.

The Head of FAS, Igor Artemiev pointed out that “the EC has been conducting the investigation for already a long time, American Courts already made several decisions on the issue. We have been monitoring the situation closely for long, and when Yandex approached us, we opened a case against Google.”

FAS suspects that Google violated Part 1 Article 14 of No.135-FZ Federal Law “On Protection of Competition” and, possibly, some other Articles of No.135-FZ.

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