If you want to play the tech game in Russia, you have to abide by Russia law. Those laws are constantly changing, as Google has recently discovered.
A recent complaint by Russian search engine, Yandex, has led to the decision (by the Russian government) to demand that Google open up its Android operating system to allow competitors to pre-install applications on Android phones.
To put it simply: Google won’t be the only company that installs apps on Android phones out of the box. Further, companies like Yandex will now be allowed to create apps for Android phones, so that users can choose which search engine to use while operating Android devices.
Why Google Has Acquiesced
Google has had a hard time operating in Russia, but that’s par for the course. Most companies that come from North America have a hard time operating in Russia. The rules in Russia are simply different - and that’s not necessarily a bad thing, just a different thing. So while Google owns Android, Russian competitor companies want a piece of the Android pie too.
If Google did not open up its Android operating system, the company would probably not have been able to operate in Russia, and this would have been a big hit for the company. So Google has opened up Android, allowed users to choose any search engine, and will work within Russian guidelines.
An Interesting Deal Brokered
Google has also told press that it has made room for Yandex within Chrome, and that Yandex will be able to advertise in Chrome with ‘new opportunities.’ The deal that Google brokered with Yandex has been approved by the Russian government and will last roughly for six months. After that, the terms of the deal will presumably be renegotiated.
Not the First Problem
A number of tech companies have had a hard time breaking into the Russian market. Google is playing by government rules, but other companies have not been as lucky to broker rules that work for all involved. In addition, Google has to pay millions in fines due to the lack of allowing Russian companies to compete in the Android space - $7 million to be specific.
Google has a large amount of users in Russia, though, which is why the company is fighting to stay in the country. Shares of Yandex have shot up since the Google announcement, and Yandex will profit from ad space through Chrome. It’s not clear where the fine that Google has to pay will go at this time.
Presumably, some of that money will go to the government while other funds will go to competitor companies that could not originally be an active part of Android. In short, Google has had to pay a pretty penny to stay in Russia. This is not the first time that the Russian government has intervened with tech companies operating in Russia. It also will not be the last. The government is wary of companies like Google coming into the country and not giving the chance to Russian companies to compete.