Google complying with EC ruling by charging Android vendors for Play Store, Google apps
Google will start to charge Android smartphone and tablet producers a licensing fee to include the Google Play Store and other essential apps on devices sold in Europe, as a way to comply with the European Commission's antitrust decision.
In response to the regulator's ruling, which saw the search giant fined $5 billion for breaking antitrust rules, Google will be making a number of changes to how it provides its products and services to Android device vendors selling devices in the European Economic Area (EEA).
The headline change Google will be making is how it licenses apps, with vendors able to license the Google mobile application suite separately from the Google Search App or the Chrome browser.
"Since the pre-installation of Google Search and Chrome together with our other apps helped us fund the development and free distribution of Android, we will introduce a new paid licensing agreement for smartphones and tablets shipped into the EEA," writes Senior Vice President of Platforms and Ecosystems Hiroshi Lockheimer. "Android will remain free and open source."
The Commission found Google required smartphone vendors to pre-install the Google Search and Chrome apps on their devices as a condition for accessing the Google Play Store. Google also allegedly made payments to major device producers and carriers, if they exclusively pre-installed the Google Search app on their devices.
Outside of a few examples like Amazon's Fire tablet range, Android smartphones are generally expected to include the Google Play Store and the other Google apps. By needing to have the apps installed, vendors had to submit to Google's rules relating to competing apps, or face not having what users would deem essential apps on their devices.
Google was also accused of stopping mobile device producers from making products that ran on a forked version of Android, or otherwise they would be prevented from installing Google's apps. Under the announced changes, the compatibility agreements with mobile device makers will be update to allow the production of forked and incompatible devices, while still allowing them to distribute Google apps.
There will also be separate licenses offered for the Google Search app and to Chrome, while new commercial agreements will be offered to partners for non-exclusive pre-installation and placement of the apps on the devices. Again, competing apps will be allows to be pre-installed alongside Google's.
The new licensing options will start from October 29 for all new smartphones and tablets launched in the EEA.
Google also advises it is appealing the European Commission's decision, and has filed with the General Court of the European Union last week.
"In July, in our response to the European Commission's competition decision against Android, we said that rapid innovation, wide choice, and falling prices are classic hallmarks of robust competition, and that Android has enabled all of them. We believe that Android has created more choice, not less," states Lockheimer.
The European Commission demanded Google change its conduct within 90 days, or face penalty payments on top of the existing fine of up to 5 percent of the average daily worldwide turnover of its parent company, Alphabet. The $5 billion element is said by the Commission to "take account of the duration and gravity of the infringement" since 2011.
"Google has used Android as a vehicle to cement the dominance of its search engine," declared Competition Commissioner Margrethe Vestager at the time of the ruling. "These practices have denied rivals the chance to innovate and compete on the merits. They have denied European Consumers the benefits of effective competition in the important mobile sphere."
"This is illegal under EU antitrust rules."
The $5 billion fine is not the first the Commission has applied against Google relating to search. An investigation completed in June 2017 declared Google promoted its own products in search results while simultaneously demoting its competitors, resulting in a $2.72 billion fine.
In response to the regulator's ruling, which saw the search giant fined $5 billion for breaking antitrust rules, Google will be making a number of changes to how it provides its products and services to Android device vendors selling devices in the European Economic Area (EEA).
The headline change Google will be making is how it licenses apps, with vendors able to license the Google mobile application suite separately from the Google Search App or the Chrome browser.
"Since the pre-installation of Google Search and Chrome together with our other apps helped us fund the development and free distribution of Android, we will introduce a new paid licensing agreement for smartphones and tablets shipped into the EEA," writes Senior Vice President of Platforms and Ecosystems Hiroshi Lockheimer. "Android will remain free and open source."
The Commission found Google required smartphone vendors to pre-install the Google Search and Chrome apps on their devices as a condition for accessing the Google Play Store. Google also allegedly made payments to major device producers and carriers, if they exclusively pre-installed the Google Search app on their devices.
Outside of a few examples like Amazon's Fire tablet range, Android smartphones are generally expected to include the Google Play Store and the other Google apps. By needing to have the apps installed, vendors had to submit to Google's rules relating to competing apps, or face not having what users would deem essential apps on their devices.
Google was also accused of stopping mobile device producers from making products that ran on a forked version of Android, or otherwise they would be prevented from installing Google's apps. Under the announced changes, the compatibility agreements with mobile device makers will be update to allow the production of forked and incompatible devices, while still allowing them to distribute Google apps.
There will also be separate licenses offered for the Google Search app and to Chrome, while new commercial agreements will be offered to partners for non-exclusive pre-installation and placement of the apps on the devices. Again, competing apps will be allows to be pre-installed alongside Google's.
The new licensing options will start from October 29 for all new smartphones and tablets launched in the EEA.
Google also advises it is appealing the European Commission's decision, and has filed with the General Court of the European Union last week.
"In July, in our response to the European Commission's competition decision against Android, we said that rapid innovation, wide choice, and falling prices are classic hallmarks of robust competition, and that Android has enabled all of them. We believe that Android has created more choice, not less," states Lockheimer.
The European Commission demanded Google change its conduct within 90 days, or face penalty payments on top of the existing fine of up to 5 percent of the average daily worldwide turnover of its parent company, Alphabet. The $5 billion element is said by the Commission to "take account of the duration and gravity of the infringement" since 2011.
"Google has used Android as a vehicle to cement the dominance of its search engine," declared Competition Commissioner Margrethe Vestager at the time of the ruling. "These practices have denied rivals the chance to innovate and compete on the merits. They have denied European Consumers the benefits of effective competition in the important mobile sphere."
"This is illegal under EU antitrust rules."
The $5 billion fine is not the first the Commission has applied against Google relating to search. An investigation completed in June 2017 declared Google promoted its own products in search results while simultaneously demoting its competitors, resulting in a $2.72 billion fine.
Comments
Personally I doubt much change in share numbers anytime in the near future, nor do I expect it to be much of a licensing fee anyway. I'd be surprised if it's enough to be a noticeable revenue contributor for Google.
Google is not forcing any company to use their OS. There are other OS's out there they can pick from and use. This is just trying to get things both ways. I think Google should just charge $50 for every copy of Android sold in the EU. Then you can keep and delete any part of the OS you want. You want a forked version, so be it. As part of that fee, you get free security updates. Any OS upgrades for that phone will cost a OS Upgrade fee.
Not common at all. Only if you cherry pick a few specific examples and ignore the rest of the world.
how does google make any money otherwise?
apple was singled out, for example, even though a large number of European companies use Luxembourg in exactly the same way.
google makes almost all of its sales and profits from advertising.
I do agree Android phone manufacturers should be able to bundle whatever they want, but Google’s Apps should still be there somewhere.
I don’t understand what you’re saying. AOSP is Google’s forked version that doesn’t include, or allow, Google’s Services. Though now, with payments, they might.
link:
https://www.theverge.com/2018/10/16/17984074/google-eu-android-licensing-bundle-chrome-search
Oh boy!
WRT our phones:
LG collects smartphone IP royalties based on device cost.
Nokia collects smartphone IP royalties based on device cost
Huawei collects smartphone IP royalties based on device cost.
Ericson collects smartphone IP royalties based on device cost.
ZTE collects smartphone royalties based on device cost.
Motorola collects smartphone royalties based on device cost.
...and going forward Qualcomm will continue to collect smartphone royalties based on device cost. Legal. And common. And yes it's not a favorite royalty basis for companies with high ASP's. Fot that reason a company like Apple might get a "rebate, or there might be a cost cap to help mitigate the maximum charges.
http://www.sisvel.com/MCP/LTE_Royalty_Rate.pdf
https://www.iam-media.com/practical-guide-determining-frand-telecommunications-industry
And more for your reading pleasure in case you still want to say I'm wrong
https://www.bvresources.com/blogs/intellectual-property-news/2018/04/18/intellectual-property-trends-average-royalty-rates-most-active-industries-and-more
https://www.iam-media.com/frand-royalty-and-mobile-telecoms-seps-analysis-recent-court-cases
In other industries it may be even MORE common to charge royalties based on product cost, for instance medical devices.
Wow you are a RUDE PILE OF CR*P!!!
You don't know what you're talking about. Yes Google Licence Android to use it. This in keeping from the same company being able to use FORKED versions of Android. I'm all for Google now just charging any phone sold in the EU that wants to use Android a $50 Licence fee. Maybe more!!! Then if you want to use a forked version of Android on your phone, you are free to do so and Google will still support you in the Play store and anything else and still get security updates. If you want a OS upgrade on that phone, that's another fee, a reduced Upgrade OS fee.
So long as these company's are getting the OS for free, they should have to follow the rules GOOGLE put forth. Google is the one spending the time and money in developing the OS. These company's just want Google to spend their money and time, and then they do anything they want with it. Well F the EU!!!!! You can't have it both ways.
Google is not forcing a single company to use Android. Company's in China managed to have nothing at all to do with Google. They do just fine. Amazon has nothing to do with Google . These company's can spend their own time and money writing their own OS and do anything they want with that. There are also other choices. It was really these dumb company's using that free Android OS, and now making it the dominate OS out there. I don't even like Android for a number of reasons, but I'm still on Google's side of this. This is really a load of B.S. Attacking yet another American Company for MONEY. Which is really just theft. Why bother doing anything in the EU. No American company is stopping anyone in the EU from creating their own OS or using something that's already out there.
How about SailfishOS? https://sailfishos.org/
How about Ubuntu Touch? https://ubports.com/
WebOS? http://webosose.org/
LineageOS https://lineageos.org/
Samesung has their own TIZEN.
I'm sure there's others out there that haven't been discontinued.
Instead these company's want Google to do all the work and spend all the money, and then they can come along, take it, and do anything they want. Well that is just flat out wrong. Sounds like Entitlement for a Business.
It doesn’t apply to Apple because the make the phone and the operating system.
But the other reason they’ll lose is because the EU is both the judge and jury, which in my layperson’s opinion, is bloody ridiculous.
I'd much rather have a more level playing field, and if that means that Google charges for their value-add in Google services, so be it. If Google services were available on Amazon's devices, it would open up a whole new market for educational use of their products, just through the availability of Google Docs alone. As it stands now, Amazon is BARRED from that market because the Kindle, a limited-use device, uses AOSP.
Say what you will about Amazon, I'm just using them as an example-- others are also impeded in the same way.
You gave examples of other OS’s but it’s problematic because they can’t truly compete on app selection, and app selection is everything. You cite China but failed because it’s a cultural thing—any US or European business wanting to build a phone without Android will more than likely not succeed like Chinese manufacturers have. Isn’t Amazon’s FireOS based on Android? Amazon has strong armed their way into the market with their other successes and they are not exactly a market leader.
Android is a relatively good mobile operating system with wide adoption that manufacturers can use with minimal cost to themselves. Unless they have principles against that or Android, it’d be stupid to not use it. Google wants it that way. They created the nipple that others want to suckle.
With that said, I think the EU’s days are numbered. They are dangerously close to repeating failed governmental attempts in the past, just wearing different clothes. Some of the masses don’t see it yet but eventually they will.