Google is being forced to rework the app bundling policy that dictates what apps smartphone makers can preload on their phones. And any change in policy will have global repercussions
Google is under fire in Russia, for what the regulators have ruled as anti-competitive practices related to the company’s Android software for smartphones. The anti-monopoly court has found Google guilty of forcing its smartphone partners to preload the Google Play Store as well as a bunch of other Google apps and in turn not install any rival apps, on the Android phones they manufacture and sell. The Federal Antimonopoly Service (FAS) has ordered Google to make changes to the bundling policies, by 18 November.
This comes after Russian search service Yandex has filed a complaint last month, that Google’s policies have been anti-competitive and hurting the competition. It wants Google’s partners to be able to include apps that aren’t made by Google, and not have an unfair advantage in driving people towards its own services. Yandex, like Google, is far more than just a search engine, and has a bunch of apps and services—mail, maps, web brower, video service and more.
In a quote pulled from the FAS of the Russian Federation’s statement (translated via Google Translate, since it has not been updated on the English language site: “In order to restore competition in the market, Google adjust the agreements with the manufacturers of mobile devices to exclude from the agreements anticompetitive requirements limiting the installation of applications and services to other developers." (Read more here.)
Look at it from the perspective of the phone makers. They manufacture Android phones, but Google’s policies clearly state that any device they sell cannot have competitor’s apps preinstalled, if the same device has to also carry the Google Play Store, apps and Play services. Essentially, the same phone cannot come with the Google Play Store and the Yandex app store preloaded, for example. If, for instance, HTC wants to sell an Android phone with the Gmail and Hangouts app, it is also forced to install Google+—hence the bundling issue. This puts the phone makers in a tight spot—they cannot just ignore Google Play Store and Google apps and go with a rival, because the end user experience may not be as good. And since that will directly impact future sales of their products, manufacturers do not take that risk, and usually stick with Google’s ecosystem. It is also a genuine concern that app stores from the likes of Yandex and China’s Baidu aren’t half as good as the Google Play Store, simply because of the poorer quality of apps and a clunky user experience. And then there is always the issue of malware creeping into phones, compromising data security.
Incidentally, Russia isn’t the only country where Google is facing similar complaints around anti-competitive practices. In April, the European Union Competition Commission opened an investigation into Google’s deals with smartphone manufacturers. Earlier this year, Microsoft was subject to a $1.5 billion fine for bundling the Internet Explorer web browser on Windows computers, in a very similar case. The United States Federal Trade Commission (FTC) has also heard similar complaints on Android bundling, and could start an investigation.
While it may be too late to change the verdict in Russia, Google has already been making changes to the entire bundling policy globally. Phone makers are now no longer being forced to preload Google+, Google Play Games, Google Play Books, and Google Newsstand apps on the phones they sell. And this could count in Google’s favour if the EU and the US FTC decide to pursue the matter further.