Federal Antimonopoly Service against Google: Economic Analysis for Special Markets

Abstract

The forming features of markets with network effects including the software markets are essentially important for effective business models in various spheres of business activity. First of all, it is connected with understanding of network effect and reasons of its use which are key factors not only commercial success of products and services, but also forming of adequate measures of economic policy, including antitrust. The article describes the case against Google, Inc. and Google Ireland Limited company (affiliated company) on suspicion of violation of the Russian antitrust law. The market of the pre-installed applications for OC Android localized for Russia which represents the market with network effects is a subject of the economic analysis. The signs of antitrust violation include the characteristics of the multilateral markets, in particular a platform (app store of Google) on the sides of market without which very difficult to create and support directly the product at the market. Namely bundling or tying which can be considered as equivalent of excluding agreement to create barriers on the market for the potential newcomer. The description of similar cases like the case against Google, Inc. corporation and the Google Ireland Limited company, and also the case against the Microsoft company which showed all difficulties of law application in the field of monopolization constraint (in terms of USA antitrust law) or abuse of dominance (in terms of European antitrust legislation) have the opportunity to show the fact that such decisions can be justified in principle.