Google To Charge Hardware Companies To Use Its Apps To Comply With EU

Alphabet’s Google is gearing up to charge hardware companies as much as $40 per device to use its mobile apps as part of a new licensing system that will replace one the European Union found was anticompetitive.

Reuters, citing a person familiar with the matter, reported late last week that the fees kick off on October 29 for any smartphone or tablet model that is launched in the European Economic area and runs Google’s Android operating system. The fee will start at $2.50 and increase depending on the country and device size, noted Reuters. The person told Reuters that the majority of manufacturers will pay about $20.  Reuters noted the companies can offset the charge by displaying Google’s search and Chrome internet browser in a prominent position. Google would give the maker of the device a portion of the ad revenue it generates via search and Chrome if it opted to do that.

In July the European Commission ruled Google abused its dominance in the market for mobile software by forcing Android partners to preinstall search and Chrome on their devices. As a result of the ruling, Google was fined $5 billion, a record. Google has appealed the ruling. It could take years for the appeal to work its way through the European Court of Justice. Google has until October 28 to address the issues laid out by the European Union. If the European Commission finds Google didn’t make moves to fix the allegations, it can be fined up to 5 percent of its average daily worldwide turnover, noted the report.

Analysts told Reuters that the new system will give Google rivals including Microsoft more of an opportunity to partner with hardware makers so that they become the default apps for search and browsing. Reuters pointed to a statement from Qwant, a small French search company that has been critical of Google. It told Reuters it was “satisfied that the European Commission’s action pushed Google to finally give manufacturers the possibility to offer such choices to consumers.”