Google settles with Russia’s anti-monopoly watchdog over smartphone apps

Google has agreed to pay Rbs439m in fines and rewrite its contracts with smartphone manufacturers under a settlement finalised Monday with Russia’s anti-monopoly watchdog.

The settlement ends a two-year legal battle after regulators – acting on a complaint filed by Yandex, Google’s main competitor in Russia – found that previous deals giving Google apps prominence over rivals were unfair.

Under the agreement, which is to last for six years and nine months, Google will have to sign new contracts with manufacturers that allow them to install competitors’ apps on Android phones’ default screens. The agreement is the first time Google has waived exclusivity rights over the default screen on Android, which it developed.

Google and Yandex agreed that further versions of Chrome and the Android search widget will give Russian users the option of switching to Yandex’s search. The changes, which will take place in the next few months, will come as default on new Android phones and be implemented in future versions of Chrome for phones already in use.

“We are happy to continue to offer our services to users in Russia,” Matt Sucherman, deputy general counsel for Google, said in a statement.

Yandex says it expects its share of the Russian-language search market on Android to grow to well above 50 per cent after the settlement takes effect. The company, which controls more than half the Russian search market on desktops, currently accounts for 38 per cent of Russian-language searches.

The company filed the complaint in early 2015 after Google signed contracts with manufacturers that gave its own apps exclusivity over the default selection offered to Android users. “We couldn’t get on the second screen, or the tenth screen,” said Yandex chief executive Arkady Volozh.

Mr Volozh hopes the Russian settlement will influence similar proceedings against Google in the EU, Turkey and South Korea. “This is a unique situation,” he said.

Last month, the anti-monopoly watchdog said Apple’s Russian subsidiary had illegally ordered retailers to fix prices of its iPhone 5 and iPhone 6 products. The ruling could potentially lead to a fine.