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Google to start charging a licensing fee after EU Android ruling

Google will start charging a fee to mobile device manufactur..

Google will start charging a fee to mobile device manufacturers seeking access to its Play Store and suite of apps after an EU decision that fined the search giant €4.3 billion for abusing the dominance of its Android operating system.

The fee is designed to offset any losses Google might incur for changing its contracts with manufacturers such as Samsung and Huawei when complying with the European Commissions landmark decision in July. The Commission ruled that the U.S. tech giant had abused its dominant position in Android to “cement the dominance of its search engine.”

Google responded to the Commissions demands by no longer tying its lucrative Chrome browser and Search apps to the Play Store, which the Commission described as a “must-have” app.

For new devices, manufacturers relying on Googles version of Android now need to pay a license fee to offer the Play Store and a range of other apps including Maps and Youtube. Chrome and Search can be obtained through a separate and free license.

This opens the door further for producers of Android-run smartphones and tablets such as Samsung and Huawei to keep their access to the Play Store while offering, for example, Microsofts Bing search engine or Mozillas Firefox browser.

The license fee — a flat rate on each new model — is said to be designed to compensate Google for potential losses over the reduced search activity that these new collaborations would entail. It will be up to the manufacturers to decide whether they pass on the fees to consumers. They might be able to offset the fees with gains from new deals with app providers.

The manufacturers are now also allowed to offer other phones using a forked version of Android in parallel, a possibility previously prevented by Googles contracts and deemed anti-competitive by the Commission. They will no longer be able to use the Android brand when doing so, however.

Forked versions are operating systems such as Amazons Fire that are based on the Android base code but are not compatible with Google apps and apps designed for Googles Play Store. Using a forked version, you would only be able to access Google services using another browser, like Firefox, for example.

“We have now informed the European Commission of the changes we will make while the appeal is pending,” Hiroshi Lockheimer, senior vice president platforms and ecosystems at Google, said in a blog post, referring to the challenge filed with the EU General Court last week against the Commission decision.

Google has until October 29 to comply with the decisions three main orders for contractual changes.

“These new licensing options will come into effect on 29 October 2018, for all new smartphones and tablets launched in the EEA. Well be working closely with our Android partners in the coming weeks and months to transition to the new agreements,” Lockheimer said.

A Commission spokesperson said the decision “is designed to allow, for the first time, competing search and browser providers to compete on the merits with Google for pre-installation on Android devices, leading to greater choice for consumers.”

The Commissions monitoring of Googles Android remedies is expected to be a continuous process.

The agency has still not communicated in detail about the implementation of a June 2017 decision fining Google € 2.4 billion over its comparison shopping service.

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