The new Google app costs up to 40 USD per phone as part of the new EU Android offer

Android makers will have to pay Google a surprisingly high cost in Europe to include the Google Play Store and other mobile apps on their devices, according to documents obtained by The edge. A confidential fee schedule indicates that the installation of the "Google Mobile Services" suite of applications, which includes the Google Play Store, can cost up to $ 40 per device. The new fees vary by country and device type and would apply to devices activated as of February 1, 2019.

But phone makers may not really bear the cost: Google also offers separate contracts to cover all or part of the licensing costs for companies that choose to install Chrome and Google Search on their devices, a person familiar with the software. terms.

Google's license terms are changing in Europe later this month due to a European Commission decision banning the company from requiring phone makers to combine Chrome and search with the rest of its suite. applications. In public statements, Google has been cautious about the exact structure of the new license fees, but documents reveal that agreement with EU manufacturers will be evaluated by country and by density pixels.

EU countries are divided into three levels, the highest costs being those of the United Kingdom, Sweden, Germany, Norway and the Netherlands. In these countries, a device with a pixel density greater than 500ppi would pay $ 40 to get a license from the Google suite of applications, according to the pricing documents. 400 to 500 dpi devices would pay $ 20, while devices with less than 400 dpi would pay only $ 10. In some countries, for low-end phones, fees may be $ 2.50 per device.

It is unclear why the pixel density is so central in the pricing scheme, but it is probably used as an indicator of the price of the entire device, because higher pixel density devices usually cost more. (The Samsung Galaxy S9 has a pixel density of 570 dpi, for example.) The tablets would also face a completely different pricing level, applied uniformly from country to country and capped at $ 20 per device. It is possible that some manufacturers may negotiate separate agreements, but a source familiar with the structure said it was unlikely that they would vary significantly.

In addition to offsetting initial fees, manufacturers who do not pre-install Chrome may also lack browser-based search revenue, a long-term incentive to prioritize Google and its apps. According to the new agreement, Google would not pay the search revenue share for devices that do not preinstall Chrome and do not place it in the docking station of the phone's home screen . "If the company chooses not to place the Google Chrome browser on the application dock for any qualified device provided in the EEA [European Economic Area], "The contract states that" The company will not be entitled to any of the revenue generated by Google Chrome for this or these qualified devices. "

The European Commission's decision does not explicitly require Google to charge a license fee, but Google must separate its traditional set of applications. The court found that by combining search and Chrome in Android, Google was stifling innovation and preventing device makers from signing better deals regarding pre-installed browsers and search engines. Announced in July, the decision was also fined $ 5 billion, although prospective unbundling measures should be more significant. The Commission considers this breakthrough as a means to increase competition, which could reduce costs or offer more options to consumers in the long run.

Google's profits come from Google Chrome and search. Without them, Google has chosen to fund the distribution of the rest of its apps and services with these fees per device. If the phone or tablet companies want to include one of Google's apps, they'll have to pay, and then decide whether to enter into a separate search and browse contract with Google to recover some of the costs. Most people will probably come to an agreement, since the Google Play Store is the distribution point for the vast majority of Android apps. If companies want to use Facebook, Instagram, Snapchat and other major apps on their devices, Google pay is the simplest way.

Critics of the commission's judgment see it as a new cost to pass on to consumers, a view that new licensing fees may bring home. One of Google's main selling points from manufacturers is the lack of fees associated with Android – a major advantage over Microsoft, which offers its alternative operating system at a cost. Now that companies will pay per device in Europe, there is a good chance that overall device costs will increase to compensate for lost revenue.