Google plans to start charging smartphone makers that want to install its app store and services for devices sold in Europe, changes it says that it must make to comply with an EU antitrust order in July that brought a record 4.3 billion euro (US$4.97 billion at the current exchange rate) fine.
Starting Oct. 29, new smartphone models that install the Play store and a bundle of Google apps, including Gmail, YouTube and Google Maps, must pay a licensing fee, the Alphabet Inc unit said in a blog posting on Tuesday.
Smartphone makers can choose to add Google’s Search and Chrome browser apps for free, or install alternatives.
The Google Play store is the most important feature of the Android operating system, because it brings millions of apps that make smartphones useful.
Google had forced manufacturers to preinstall Search and Chrome if they wanted to use it, restrictions that the EU found unlawful.
It gave the company a deadline of next week to stop. The changes put an end in Europe to a strategy of ensuring these money-making search and Web ads get huge distribution.
Google said that the advertising revenue generated from the Search and Chrome apps “helped us fund the development and free distribution of Android.”
Ending the deals with manufacturers that pushed those two apps out to all Android phones means that the company now plans to monetize Android with the paid licensing agreement, which only affects smartphones shipped to Europe.
Shares in Alphabet, Google’s parent company, on Tuesday rose US$25.29, or 2.3 percent, to US$1,117.54 in New York trading. They have climbed 6.9 percent this year, compared with a 4.5 percent increase in the Standard & Poor’s 500 Index.
The European Commission said it was Google’s responsibility to comply with the order, and that it would monitor the effectiveness of the company’s moves.
“It is for Google to decide exactly how to comply with the commission’s decision,” European Commission spokesman Ricardo Cardoso said in an e-mail. “The decision does not require Google to charge for any of its apps or for the Play store.”
The Google Play store is a gateway for Android users to access other popular non-Google apps — such as Facebook and Snapchat — so manufacturers will have an incentive to pay for the store and the extra Google apps.
Licensing fees paid by manufacturers are likely to be moderate and could be recouped by revenue-share agreements for placing Google apps prominently on a screen.
Changes could take months, if not more than a year, to trickle into the market given the normal development cycles for mobile devices.
Under the changes just unveiled, manufacturers are no longer prevented from experimenting with smartphones loaded with different apps or using an operating system based on the Android software, but not carrying the Android name.
This might not harm Google if it relies on the strength of its brand to label smartphones as Android, which might mean having additional Android green robot stickers at smartphone retail centers to highlight Google-approved models.
The firm is fighting the Android decision in the EU courts, along with an earlier legal challenge to last year’s fine for its shopping service, even as regulators are weighing a third investigation into the company’s advertising contracts.
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