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Google will pay $7.8 million and open up its Android software to competitors as part of a settlement with Russian antitrust authorities, Reuters reported on Monday. The deal could be a precedent-setting settlement for the tech company.
Google, like Microsoft before it, was accused of exploiting the market dominance of its Android smartphone operating system, in order to shut out competition and protect its online search traffic. The Android OS is by far the most common operating system for smartphones globally, operating on nearly nine out of every ten smartphones phones worldwide.Muscling Out the Competition
Android's share of the smartphone OS market is truly astonishing. Google's Android captured 87.5 percent of the global smartphone market in the third quarter of 2016, according to Strategy Analytics. Shipments of Android phones reached 328.6 million, an increase of more than 10 percent year-over-year.
That has huge implications not just for phone operating systems, but for search engines. Google already dominates the search market, taking up more than 90 percent of the European market. As mobile search continues to grow -- it currently makes up more than half of all searches -- Android's dominance starts to rival that of its parent.
That dominance, and the way Google and Android leverage that dominance, has caused competitors, such as Russia's Yandex, to cry foul.
In 2015, following a complaint by Yandex, a Russian search engine, the Russia's anti-competition authority, the Federal Antimonopoly Service, ruled that Android had violated anti-trust laws when it required that its own apps come pre-installed on mobile devices using the Android OS. Google's settlement now brings an end to that dispute.
A Model for Other Nations to Follow?
Under the deal, Google will no longer require pre-installed applications. Users will also be able to change settings at any time, allowing them to select whatever default search engine they prefer. The company will also create a new "choice window," allowing users to easily change their default search engines, according to FAS.
Google will also pay over 438 million rubles, or about $7.8 million USD. That number represents nine percent of Google's revenue in Russia since 2014.
The settlement is particularly important because it could impact similar antitrust investigations, and eventual settlements, far beyond Russia's borders. The EU is currently investigating Google over similar antitrust concerns, for example, having accused the company of using its smartphone OS as a "Trojan horse" to force its other services on consumers.