Will Google Plead Guilty in Russia or Pay the $6.8 M Fine for Android?

Google’s mobile operating system Android has been under severe fire from several quarters over the past year. After Google won the case against Oracle’s charges of code copyright infringement, there was a slew of cases against the parent company Alphabet Inc. regarding the violation of antitrust laws in at least three cases in the European Union. Russia has now joined the attack on Google, alleging that the search engine giant is forcing device makers to install Google Search as the default search engine on Android phones sold in Russia.

search engine market share in Russia - Google versus Yandex

The gist of the new case is that Yandex, Russia’s own search engine company, filed a complaint against Google in September 2015 saying that it was force-bundling Google Search on Android phones sold in the country. Nearly a year later, antitrust authorities in Russia have actually found Google guilty of the alleged “crime” and have slapped a fine of $6.8 million on the parent company.

Sources say that the authorities have been in talks with Google regarding reaching an “amicable agreement” on the matter, but require that Google admit its “guilt” as part of the agreement.

Serious Implications for Google if They Plead Guilty

If Google does bend to the will of the antitrust authority, they will either have to admit that they forced this sort of bundling or pay the fine. In my opinion, $6.8 million is a lot cheaper than the damage that such an admission will result in.

As of now, Google does leverage its ownership of the Android platform to push its search engine agenda, thereby bringing more users into its advertising networks. Ad revenues form the bulk of Google’s income, so admitting this would mean setting a precedent whereby other countries can start to hassle Alphabet about Google’s overseas practices. If this becomes a global trend, Google could lose billions in search and site advertising from Android users.

The problem Google now faces is that it has two months to pay the fine or find a legal loophole to get out of this unholy Russian mess. Though the company clearly states that Android users exercise their own right to choose when using Google Search, Yandex’s standpoint is that it kills local competition – specifically from its own search engine app for Android.

Like two dogs fighting for a scrap of meat, Google and Yandex are now in the thick of an argument that has Russian regulatory authorities stepping in and favoring the local company. Surprise, surprise!