Google To Start Charging A Licensing Fee For Android In Europe

David Johnson - Author

Oct. 17 2018, Updated 4:51 a.m. ET

For a long time, Google has been regarded as the Microsoft of smartphones. Soon, they will be taking one step closer to making that a reality. The New York Times has the report.

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“LONDON — Google has always made its Android mobile operating system available free as a way of getting its search engine, web browser and other applications on as many devices as possible to collect data about users and to sell advertising.

But on Tuesday, in response to a European antitrust ruling this year, the company said it would for the first time begin charging handset manufacturers to install Gmail, Google Maps and other popular applications for Android in the European Union.”

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The motivation to charge a licensing fee is based on another shared attribute with Microsoft. Google was hit with an antitrust fine of $5 billion. Google had to offer their own remedy to the problem. A licensing fee was their solution.

Regulators found Google guilty of using Microsoft-style bundling of free apps to disadvantage the competition and maintain a chokehold on the market. The search engine business is not just about helping people find things on the internet. It is a multi-billion dollar advertising play that Google dominates.

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Google’s mantra used to be that Android was open and free. However, their announcement on Tuesday suggests something different. Android was never fully open since manufacturers were forced to adhere to Google’s rules for using it. And it was never really free since Google is having to charge a fee to make up for lost revenue from not being able to control it as they once did.

While transparent to end users, there were always restrictions and costs associated with using Android. Those costs will continue to be transparent to end users. What they will experience is a slight increase in the price of new Android phones.

Manufacturers might choose to reduce some Google services and apps in their budget lineup. At the bottom of the range where profit margins are slim to none, they could decide to stick with a free version of Android with third-party services and app stores. This is unlikely to be the case in mid to upper tier phones.

The EU has yet to weigh in on this proposal. Because of the EU’s position as the world’s watchdog in such matters, it is possible to see similar rulings and similar remedies enacted elsewhere around the world.


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