In search of competition: why the European Commission fined Google $5 billion. Roskomnadzor will fine Google for issuing links to resources prohibited in the Russian Federation

They were fined a record amount of €4.3 billion (about $5 billion) for violating antitrust laws. The European Commission is confident that the company used “anti-competitive practices” related to its operating Android system.

Google is accused on three fronts. Firstly, the company obliged manufacturers of smartphones based on Android OS to pre-install Google products on them, for example, the search engine of the same name and Chrome browser. Secondly, Google specifically paid manufacturers and mobile operators so that they install only one search engine. In addition, the company prohibited the use of those Android versions, which appeared on the base open source operating system.

— European Commission (@EU_Commission) July 18, 2018

According to European Commissioner for Competition Margrethe Vestager, Google used Android as a tool to establish complete dominance of its search engine. “These actions deprived competitors of the opportunity to develop and compete with each other,” Vestager said.

The court rejected Google's argument that it was sharing the market with by Apple. The European Commission decided that the Apple company does not provide sufficient competition to Google due to more high prices and the expensive cost of switching to iPhone.

Currently, the Android operating system is installed on 80% of devices worldwide.

As noted Bloomberg, the fine for Google is equal to the annual amount that the Netherlands contributes to the budget. The company was given three months to correct it, after which it could face additional monetary penalties.

Google said it intends to challenge the ruling.

Android created many choices rather than limiting them, Google spokesman Al Verney said in a written statement. "A dynamic ecosystem, rapid innovation and low prices“a classic basis for healthy competition,” Verney added.

As Freedom Finance analyst Alen Sabitov told Gazeta.Ru, since Alphabet [Google's parent company - Gazeta.Ru] has already filed an appeal against this decision, there are no mortal threats to the company.

“The fine will significantly affect the results of net profit in the third quarter of 2018 and will reduce profits by more than half, but given the one-time nature of the operation, it will not create problems for long-term growth. The EU measures turned out to be not as tough as they could have been, and only affect issues with operating system and applications. It would be worse if the restrictions affected advertising, since this is the main driver of the company’s revenue and generates 86% of revenue,” the expert said.

The growth rate of such expenses could increase to 40% in 2019, which could create pressure on the company's margins. However, EU restrictions will not affect cloud services and YouTube, which is owned by Google.

Anti-records of the company

Just a year ago - in June 2017 - the European Commission already fined Google. According to the investigation, which lasted seven years, the company abused its position by promoting its shopping service. The court ruled that this gross violation of antitrust laws should result in a fine of €2.4 billion.

The European Union confirmed that Google showed users the results of queries in " Google Shopping”, artificially lowering the sites of the service’s competitors in search results. Then the fine imposed became the largest in history. In 2018 year Google managed to update his own record almost twice.

In 2017, the conflict between Google and the Federal Antimonopoly Service of Russia was completed, which claimed that the company violated the law “On the Protection of Competition.”

The Russian company complained about its competitors. As it became known during the investigation, Google allowed manufacturers of smartphones sold in Russia to use the application store Google Play only under certain conditions: other company services must be pre-installed on the device, including a search engine, which must be placed on the main screen.

A settlement agreement was concluded between FAS and Google, and the company was ordered to pay a fine of 438 million rubles. and two additional fines of 500 thousand rubles each for late execution of the order.

The European Commission decided that Google abused its dominant market position by giving an advantage in search results to its own products. The company will have to pay a fine of €2.42 billion and eliminate the violation within 90 days under the threat of new fines.

The European Commission fined Google €2.42 billion for violating EU antitrust rules. As follows from the department's message, Google provided an advantage in results search results own Google product Shopping to the detriment of other product aggregators. Links to this service appeared at the top of the search results page, while the positions of competing services were determined search algorithms Google, which deliberately underestimated them, notes the European Commission. Thus, on average, the link to the most popular non-Google product aggregator ended up only on the fourth page of the search.

The European Commission also points out that Google dominates the Internet search markets in all 31 countries of the European Economic Area - in 30 of them since 2008, and in the Czech Republic since 2011. In most cases, its market share exceeds 90%. According to the European Commission, the company applied practices that violated antitrust regulation in all 13 countries where it launched Google Shopping. As a result, in the UK the service's traffic increased 45 times, in Germany - 35 times, in France - 19 times, in the Netherlands - 29 times, in Spain - 17 times, in Italy - 14 times. Traffic of competing sites, on the contrary, has dropped significantly.

The European Commission gave Google 90 days to eliminate the violations. Otherwise, the company may face new fines - up to 5% of the daily turnover of Google's parent company Alphabet.

Google expressed disagreement with the decision of the European Commission. In a statement from the company, its representative noted that the regulator's decision will be reviewed, after which the company will decide whether to appeal. Google also noted that, according to the company, users prefer to see direct links to products in search results, rather than to sites of other aggregators, after switching to which search query have to repeat.

General Director of the PRT agency Gleb Sakhray on Kommersant FM:“The size of this amount raised many questions for me. Here, most likely, officials are irritated by Google's dominant and almost monopoly position in the European market. This click on the nose is due to this. Authorities indicate they are monitoring the company."

Consumer Market Department

How the European Commission brought charges against Google

The European Commission in April 2016 accused Google of abusing its dominant position in the smartphone operating system market and violating competition in the application market for the Android operating system (OS). Google's business practices deprive consumers of choice mobile applications and services and create barriers to innovation, the European Commission was convinced.

The Google search engine did not comply with Russian legislation regarding connection to the federal state information system(FSIS), containing a list of prohibited Internet resources, and will be fined up to 700 thousand rubles. This was reported on Thursday in the press service Federal service for supervision in the field of communications, information technology and mass communications(Roskomnadzor).

“During the exercise of control, Roskomnadzor recorded the fact of Google’s failure to fulfill its obligation to connect to the federal state information system. Roskomnadzor will take response measures in accordance with the Code of Administrative Offenses of the Russian Federation,” the message says.

Roskomnadzor clarified that the amount of the fine could range from 500 thousand to 700 thousand rubles.

The department explained that in accordance with Article 15.8 federal law"About information information technology and on information protection" operators operating on the territory of the Russian Federation search engines are required to exclude Internet resources blocked in Russia from search results.

Previously, Roskomnadzor sent to the company Google requirement on connection to the federal state information system. The search engine had to connect to the federal state information system containing the list of prohibited Internet resources (FSIS) within 30 days, TASS reports.

Deputy head of Roskomnadzor Vadim Subbotin explained that the agency carried out control measures against Google. The corresponding act will be sent to the court. According to him, a certain time frame will be allotted for receiving objections from Google. After this, the court will make a final decision on the fine.

Let's add in recent months Google has become the target of coordinated pressure from government agencies. In September, Roskomnadzor, the Central Election Commission, the prosecutor's office and the Federal Antimonopoly Service of the Russian Federation sent letters to Google in which they actually accused the company of sabotage political activities. Moreover, this happened on the eve of elections of deputies to regional and municipal parliaments and at a time when Google celebrated its 20th anniversary.

"We know of cases where popular services And Google tools freely become platforms that post illegal, unlawful content that directly violates the norms of Russian Federation legislation on elections,” said Deputy Head of Roskomnadzor Vadim Subbotin.

According to Subbotin, more than 40 “specialized YouTube channels in constant mode are conducting massive actions with calls to violate Russian law." "By providing virtually unlimited opportunities on the part of foreign Internet giants such as Google, a number of persons interested in destabilizing the situation in the Russian Federation are making attempts to attract users to illegal activities on the Internet," said the deputy head of the supervisory authority. departments.

FAS made a decision against Google in the case of restricting competition in the market mobile software, opened in early 2015 following a complaint from Yandex. The company was fined 438 million rubles.

The Federal Antimonopoly Service (FAS) fined Google Corporation and its subsidiary Google Ireland for violating competition, the agency said in a statement. “The fine for Google for violating antitrust laws amounted to 438 million rubles. We hope that the company will comply with our decision and pay the fine in the near future,” Deputy Head of the FAS Alexey Dotsenko is quoted as saying.

Anna Orlova, a representative of the department's press service, refused to specify the amount of the fine based on what the fine was calculated, citing commercial secrets. Earlier, the head of the FAS, Igor Artemyev, warned that the fine for Google could be up to 7% of the company’s revenue received in the market where the violation was committed. FAS defined it as the market for pre-installed application stores in Russia. If the antimonopoly service has not since changed its decision regarding the size of the fine, then the revenue of the American corporation from Google Play in Russia could amount to 6.3 billion rubles. Google does not disclose financial indicators for individual segments and countries.

A representative from Google's press service told RBC that the company received a notification from the FAS that a fine had been imposed. “We will carefully review the decision before we determine further actions", he explained.

The anti-competition case against Google was opened in February 2015 following a complaint from the corporation’s main Russian competitor, Yandex. Representatives of Yandex claimed that they encountered restrictions from a number of mobile device manufacturers (Explay, Fly, etc.): in particular, they terminated agreements on the pre-installation of mobile applications. The manufacturers referred to contractual restrictions on the part of Google, Yandex said.

In September 2015, the FAS recognized Google and its Irish subsidiary company Google Ireland is guilty of prohibiting manufacturers of mobile devices running the Android operating system (owned by Google) and installing Google Play from pre-installing competitor's applications on their devices. In its order, the Russian Antimonopoly Service obliged Google to change contracts with mobile device manufacturers, including those already concluded, and remove from them the ban on pre-installation of competitors' applications and clauses obliging manufacturers to install applications, products and services from Google Play together with Google Play. Google package Mobile Services (Play apps Store, Google Maps, Gmail, Drive, YouTube, Hangouts and the Chrome browser), place the icons of these applications on the first screen of the mobile device, and also set Google search as the default.

However, in early June, the deputy head of the department, Anatoly Golomolzin, said that the FAS was negotiating with Google to conclude a settlement agreement. A Yandex representative noted then in a conversation with RBC that main goal for the company are “restoring the competitive situation in the market and eliminating the consequences of those violations that were established by the FAS and confirmed by the court.” If Google voluntarily fulfills the key requirements of the main decision of the FAS as a result of concluding a settlement agreement, the company will also be satisfied with this, a Yandex representative explained. The press service of the Internet holding declined to comment on the announced fine.

The decision was in favor of " Yandex ", the American corporation tried to challenge it in the Moscow Arbitration Court at the end of 2015, and in March of this year it rejected the claim. However, Google continues to challenge the decision of the antimonopoly department: the next court hearing is scheduled to take place on August 16. Orlova noted that negotiations regarding the settlement agreement are ongoing, refusing to talk about its possible conditions. The possible settlement agreement will not affect the decision on the amount of the fine, she clarified.

In July 2016 CEO"Yandex" in Russia Alexander Shulgin, announcing the company's results for the second quarter, said that the company managed to conclude new agreements on the distribution of its applications with mobile device manufacturers after the FAS decision. As a result of these agreements, the share Russian company in search on mobile devices with operating system Android started grow at the end of June, Shulgin.