An EU decision with consequences: Google forces mobile phone manufacturers to pay

An EU decision with consequences: Google forces mobile phone manufacturers to pay

Google Changes the Android Business Model – More Freedom for Smartphone Providers.

Decision with consequences: the Android mascot is looking into a turbulent future. Image: Reuters

For a long time, Google has managed the strategy of providing mobile phone manufacturers with free Android operating system and many Google applications. After all, the American group has established itself as the market leader in front of Apple. The market share of Android devices accounting for over 80% of smartphone sales speaks volumes.

But after years of investigation and a $ 1 billion fine from the EU in July, Google needs to change its business model. According to the European Commission, manufacturers are forced to act because of restrictions imposed on the use of Android. Finally, the Commission also called for concrete measures to counter the unfair competition allegation.

In response, the IT giant is allowing manufacturers to pay for Google Apps licenses for the first time. This applies from October 29 for all newly purchased Android phones in Europe. Although Google does not share the Commission's point of view, a recent appeal could be brought before all courts. It may take some time before a final decision is made. Therefore, Google must already implement the claims.

Android is free

The operating system itself should continue to get the manufacturer for free, Google points out. In Brussels, on the other hand, it is important to note that making Android applications a paid application was not one of the demands of the European Commission. That was the case of Google, how exactly would the disputed competition distortions be eliminated.

In addition, a request from the Commission concerned the conditions of installation of the App Store. For its use, Google had previously written to manufacturers to preinstall Google's search engine and browser on their devices. In the mandatory grouping of Google Apps, they saw an attempt to transfer the dominance of the group in PC Internet search to mobile devices. This also belongs to the past: in the future, manufacturers can freely decide to deliver their smartphones with or without these components.

Are the prices of mobile phones increasing?

The consequences of Google's change of strategy are currently not predictable. Whatever the case may be, the good news for Android users is that providers such as Samsung can now offer Android smartphones without Google Apps.

In any case, this creates an opportunity: mobile providers are no longer as strictly related to Google and can better implement their own applications – in theory even their own app stores. It will also be easier for third-party vendors to compete with the Play Store.

Customers could also benefit from the fact that manufacturers focus on developing devices that can do without Google. Until now, these "bespoke products" have been developed almost exclusively for the Chinese market. Such devices have also become interesting for Europe.

Even third-party manufacturers who want to offer both Google-licensed Android devices as well as Android-powered Android devices must make Google's decision. Previously, they had to commit to not selling Android variants if they wanted to have Google apps on their devices. Again, the Commission has witnessed unfair competition. Amazon has already demonstrated this with FireOS a few years ago. Now, other similar projects could follow.

The fact that the new payment model is increasing the prices of Android smartphones is unlikely from the current point of view. It is unclear how much new licensing fees manufacturers will have to pay. Here is the interest of Google, the own applications also continue to bring among people, speak rather for a small fee.

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