Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Google fined $6.8M by Russian Antimonopoly Service, (Aug 11, 2016)

By Greg Hammond, J.D.

The Federal Antimonopoly Service (FAS) of Russia has imposed an administrative fine of nearly $6.8 million against Google Inc. for violating the country’s antimonopoly law. The fine follows the FAS’ determination, in September 2015, that Google abused its market dominance by requiring certain mobile device vendors that use Google’s Android mobile operating system to pre-install Google applications and to give priority positioning of the applications on device home pages.

The FAS opened its investigation in February 2015. The agency, however, terminated proceedings that Google engaged in unfair competition, finding that the company’s actions did not amount to a violation. The imposed fine is much less than allowed by Russian law, which allows fines ranging from one to 15 percent of the income gained from selling the goods on the market where the violation was committed.

EC allegations. Google is facing similar allegations in the European Union. In a statement of objections, sent to Google in April 2016, the European Commission (EC) claimed that Google’s restrictions on Android device manufacturers and mobile network operators constituted an abuse of dominant position in three markets, including the markets for general Internet search services, licensable smart mobile operating systems, and app stores for the Android mobile operating system. Google has market shares of 90 percent or more in each of these markets in most EU Member States, the EC asserted.

In particular, the EC claimed that Google breached EU antitrust law by: (1) requiring manufacturers to pre-install Google Search and Google’s Chrome browser and to set Google Search as the default search service on their devices, as a condition to license certain Google proprietary apps; (2) preventing manufacturers from selling smart mobile devices running on competing operating systems based on the Android open source code; and (3) giving financial incentives to manufacturers and mobile network operators to exclusively pre-install Google Search on their devices.

FTC action. It is still uncertain whether the FTC will file antitrust charges against Google. Consumer Watchdog, however, has urged the Commission to take action. "Google engages in exactly the same anti-competitive, unfair and abusive practices in the United States," stated John Simpson, director of Consumer Watchdog’s Privacy Project. "Our antitrust enforcers need to step up and do their job instead of letting the Europeans do it for them." Consumer Watchdog claims that Google spent about $16 million on federal lobbying in 2015. "Google is well connected at the highest levels of government and throws its money around…But our antitrust enforcers can’t let that sway them. They’ve got the facts and need to act," Simpson said.

Companies: Google Inc.

News: Antitrust