Google’s Android abuse confirmed in Russia. Vitaly Dianov comments for Global Competition Review
A Russian court has upheld a decision by the Federal Antimonopoly Service that said Google abused its dominant position in the country’s market for pre-installed app stores – days after a senior competition counsel at Google criticised the enforcer for rushing through its Android investigation.
The Moscow Arbitration Court “fully supported” and “found legal” the FAS’s decision concerning Google’s abuse of dominance in the market of pre-installed app stores on the company’s Android operating system for smartphones and tablets, the enforcer announced today.
A FAS spokesperson said the court’s decision has been sent to the parties, and is expected to be made public next week.
The ruling comes months after Russia’s competition authority demanded Google end a number of practices that gave primacy to its own app store, Play, and to other Google apps, on devices running Android operating systems.
In February 2015, the authority launched an investigation into Google’s Android operating system, prompted by a complaint from Yandex – a search engine and internet company that holds approximately 60 per cent of the search market in Russia.
Last September, the enforcer found that Google had abused its dominant position, and in October demanded the company get rid of provisions in its agreements with mobile phone manufacturers that limited the installation of rival applications in Android devices.
Google was also forbidden from requiring mobile phone manufacturers to set its search service as the default search engine, and from requiring that manufacturers pre-install Play, bundle it with other Google applications, and locate Play and other apps on the device’s homescreen.
On Friday, a senior competition counsel at Google claimed that FAS rushed through the Android investigation, and then took too long to disclose the reasoning behind the eventual decision.
“We couldn’t access the file, which would have taken more time for the authority to prepare,” Tero Louko said. “There was no statement of objections, so we didn’t get to hear what the case against us was.”
Google had filed an appeal in the Moscow Commercial Court, but gained access to the enforcer’s case file for the first time last Thursday. The company has the right to seek further review from Russia’s Court of Appeal, and a spokesperson did not respond to a request to comment on whether the company planned to appeal.
Evgeny Khokhlov at Antitrust Advisory in Moscow, counsel to Yandex, said the process at the FAS and at the court was “non-discriminatory” and “well-balanced” between Google’s confidentiality requests and the need for a comprehensive review.
Both Google and Yandex requested confidentiality protection, and as a result the authority closed off part of its case file from Google, Khokhlov said. “Yandex did not have access to Google’s confidential documents, and Google did not have access to Yandex’s confidential documents.”
But the rest of the case file was open, and Google and Yandex exchanged non-confidential versions of their position papers, he said.
Google had the opportunity to provide evidence and explain its position to the FAS before the authority rendered its decision – and it was “perfectly aware of all the allegations”, he said.
Khokhlov also said FAS used almost the entire time provided for by law to consider the case: “FAS’s actual investigation took seven months, while the maximum review period under Russian law is nine months.”
Responding to Louko’s criticism that there was no statement of objections, Khokhlov said that such a statement only became mandatory on 5 January, when amendments to Russia’s competition law came into force.
Vitaly Dianov at Goltsblat of Berwin Leighton Paisner in Moscow called the Moscow court’s speedy handling of this kind of complex case “unusual”.
The court was quite right procedurally, but from a logical standpoint, and taking into account the complex nature of the hearing, the ruling today came quickly, he said.
“Frankly speaking, it’s possible that Google only today had the chance to review the authority’s full case against it – and did not have enough time to provide its arguments before the court,” he said.
But at the same time, it’s up to Google to make its claims at Russia’s Court of Appeal, he said.
Dianov said the FAS didn't accept the company’s arguments contesting that it was a dominant player in the relevant market.
“From my point of view, Google could have been more active and persuasive in this kind of cornerstone case,” he said. “But maybe we just don’t know their strategy, or how they’re planning to restructure their activities in Russia.”
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