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By Olga Razumovskaya 

MOSCOW--Russia's antimonopoly watchdog has ordered Google Inc. to rectify its antitrust law violations, potentially paving the way for a hefty fine and helping local search engine Yandex NV.

The agency gave Google a deadline of Nov. 18 to stop its practice of bundling--pre-loading its own apps and services to give them priority over rivals on its Android mobile operating system.

The regulator also said it had initiated an administrative case against Google, meaning the search giant may face a fine of up to 15% of the 2014 revenue from the preloaded apps if found guilty.

"To restore competition on the market, Google should amend agreements with mobile-device producers within a month and exclude the anticompetitive clauses that limit installment of apps and services by other developers," Russia's Federal Antimonopoly Service said in a statement late Monday.

A spokeswoman for Google Russia responded by saying: "We will be studying it [the full version of the ruling] to make a decision on further steps. Device makers are free to use Android with or without Google applications and consumers have complete freedom to use rival applications."

In mid-September, Google was found guilty in a rapid Russian antitrust probe for the alleged anticompetitive practices related to how the company preinstalls its own apps on Android handsets.

The investigation began in February after competitor Yandex lodged a complaint against the California-based giant.

"We hope that the FAS's ruling will help to restore fair competition on the market, but to what extent will depend on how this ruling will be executed," Yandex said. "Additional measures might have to be taken unless the situation changes."

Konstantin Chernyshev, an analyst at Uralsib, said the Russian regulator's decision could generate some short-term support for Yandex stock, but added: "It remains to be seen how effectively the decision will be implemented, and it is hard to estimate the effect the decision could have on market share in the online search market."

The latest ruling highlights regulation as one of the biggest risks facing Google, which has been tied up for the past years in an antitrust probe in the EU.

Earlier this year the 28-member bloc charged Google with abusing its dominance of the European online search market to favor its own shopping search service, and launched an investigation of Android, including the rules Google imposes on phone makers to get access to Google services and apps.

In 2013 Google settled with the U.S. Federal Trade Commission and agreed to change some business practices, giving advertisers more flexibility to use other ad platforms along with its main search advertising service, AdWords. Later that year, South Korea's Fair Trade Commission ruled Google had not harmed competition by requiring smartphone makers that offer Android to load Google's search engine.

Russia and several other countries have cracked down on U.S. Internet companies, launching investigations into their market power and introducing new regulations that give them more access to--and control of--information and user data stored by these companies.

Google shut its engineering office in Russia in late 2014 ahead of a controversial law requiring Internet companies to store Russians' personal data within the country's borders.

Any phone maker can use Android. But if a phone maker wants to use popular Google services like Gmail or Maps, or wants access to Google's Play app store, it must preinstall a package of these Google apps.

This helps Google distribute its services to the more than one billion Android device users, but it can also mean phones come loaded with some apps that some users and phone makers may not want on the gadgets.

Several device manufacturers that pre-install Yandex apps notified the company in 2014 that they were "no longer able to pre-install Yandex services," such as Yandex's search and map apps on Google's Android devices, prompting Yandex to file its antitrust complaint.

Write to Olga Razumovskaya at olga.razumovskaya@wsj.com

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(END) Dow Jones Newswires

October 06, 2015 07:31 ET (11:31 GMT)

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