Technonlogy

To understand Google’s Russian ordeal, look to Barcelona and Neymar

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Earlier this year, Google lost an antitrust case in Russia. The result was a fine of £6 million: small change to the search engine giant. But Russia’s Federal Antimonopoly Service (FAS) also asked Google to make changes to its Android mobile operating system.

Now the precise details of these alterations have been revealed. The outcome is a sign of things to come for Google, not only in Russia, but right across Europe, where the company is facing similar charges related to its use of Android.

“Google has been using Android to promote themselves when we all go mobile,” European Competition Commissioner Margrethe Vestager told me when we spoke earlier this year. “In order to stay dominant in search we say they’ve been using Android for this purpose.”

In June, Vestager fined Google a record-breaking €2.42 billion (£2.1 billion) for breaching EU antitrust rules with its shopping service. Taken together, these decisions (and although Vestager is yet to announce her decision on Android, she has issued a formal indictment, and in this field she is judge, jury and executioner) could reshape the way Google operates. Now, for the first time, we are seeing how that could play out.

More on Barcelona, PSG and Neymar later. First, those changes for Google in Russia. Starting this month, the company will stop making its search engine the default choice in its Chrome mobile browser. Instead, Android users in Russia opening Chrome for the first time will be shown a choice screen like the one below.

Russia's new Android choice screen, translated into English
Russia’s new Android choice screen, translated into English

Yandex

This mockup comes courtesy of Yandex, the search (and everything else) leviathan that is Google’s main rival in Russia, where it commands 64 per cent of all online search. Yandex filed the original complaint against Google in 2015. Its blogpost announcing the decision was nothing short of jubilant. “This is a huge milestone for Russian users,” it declared, calling it “something we have been working towards for a long time.”

Google was more muted. “In line with the agreement with Yandex and the settlement with FAS,” a spokesperson told me over email. “We have instituted a new opportunity for search providers to promote their search services within the Chrome app on Android devices.”

Before leaping to pick winners and losers, we should remember that these changes weren’t dictated by the FAS, but instead came through a “commercial agreement” between the two firms (a fact Yandex noticeably fails to mention in its blogpost). Nevertheless, it’s hard to escape the conclusion that this is a defeat for the American firm.

Yandex’s complaint isn’t Android itself, but what comes with it. Although Android is an open platform, key parts of it are controlled by Google. If you’re a handset maker such as HTC or Samsung, you’re free to offer a customised version, but only as long as you keep certain Google products.

Get the new Samsung Galaxy S7 Edge and the home screen will have a purple app which just says “Internet” (the browser). But it will also have the Play Store, a folder for Google apps, and, most importantly, a box for Google search. All this amounts to an immense advantage, which, of course, is exactly why Google does it.

JOSH EDELSON/AFP/Getty Images

Google’s defence is, well, you can always change if you want. (It could add that its services are better, but that’s not a politically adroit statement.) Inside Chrome’s settings, there’s an option for search engines: go there and you can switch away from Google. From Google’s point of view, its only concession is to make the existing menu more visible.

What’s really going on here, however, is a battle over defaults. Decades of research in behavioural psychology and economics has shown that, because people tend to stick with the default option in most cases, the way you set them matters a great deal. Look at the difference between countries that ask people to opt into organ donation and countries that presume you will unless you opt out: allowing for other factors, the variance is enormous. (The famous 2003 study that highlighted this was called Do Defaults Save Lives?) The same goes for everything from pensions to thermostats.

Online, defaults are, if anything, even more powerful. First, because, as Tristan Harris points out, the way we are encouraged to use our phones leaves very little space for cool, rational consideration. Second, because this is an arena where winners take all. Every time someone searches on Google, the service itself improves.

This is why competition officials are right to target the default-setting power of platforms, but also why their attempts to do so may lead to nothing: because, in a world where bigger is better, it’s impossible to create even a rough equilibrium between firms. There’ll always be one or two giants surging ahead, while erstwhile rivals die in infancy. The best competition law can do is mediate weakly between them by asking consumers to make a choice.

To see this in action, take a look at that so-called “choice screen”. Yandex might call it that, but in reality it’s not a choice at all. There are only three options: no Bing, no AOL, no DuckDuckGo (which doesn’t make it onto Android’s list of alternatives either). Just a choice between Google, Yandex, Russia’s equivalent of Google, Uber and Amazon, and Mail.Ru, Russia’s equivalent of Facebook and Instagram.

This deal was a “commercial arrangement” between the firms, not an official settlement from a competition authority. (Not that you should necessarily expect something that different, given the links between Russian internet companies and the state.) But, short of splitting the big tech firms up, and probably damaging their service, it’s hard to see what European officials can do differently. There are simply no good options.

For a comparison, think of Neymar, the Brazilian footballer who moved from Barcelona to Paris Saint-Germain last week for a record-shattering £198 million. UEFA, the body which runs European football, introduced its Financial Fair Play regulations in 2010, forbidding clubs from spending more than they earned on players. It was an attempt to stop football’s rich getting richer. But when PSG’s Qatari owners wanted to acquire Neymar, UEFA could do nothing to stand in their way. In this analogy, Google is Barcelona. Just as the Catalan club has lost one of its biggest assets, apparently clipping its toes, the sheer scale of the fee – and the total disregard for Financial Fair Play – ensures the real losers are those unable to compete at the top table. Vestager’s Android judgement is expected soon. It remains to be seen if she will fare any better.


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