Google altering business model of Android to comply with European regulations

Google will charge phone makers to use Android apps in Europe

Google announces that it will begin charging Android manufacturers for its apps

Months after being hit with a record-setting $5 billion fine from the EU, Google is making major changes to its policies in Europe.

The alternative is to use none of Google's suite of apps, and thus don't get access to the official Play Store.

It's among measures the company is taking to comply with the July ruling by European Union authorities that found Google allegedly abused the dominance of Android to stifle competitors, even as it appeals the decision. However, that's about to change ever so slightly for European Android device makers.

The EU's Competition Commissioner, Margrethe Vestager, has previously suggested that Google's restrictions prevented "forked" versions of Android, including Amazon's Fire OS, from having more impact. Google will now charge a licensing fee for Android device makers that want to deliver handsets pre-installed with apps like Gmail and YouTube within the EU.

It said the requirement that some manufacturers preinstall Google applications as a condition for licensing the Google Play store, as well as the payments made to other, larger phone makers and operators for pre-installing the Google search app on devices were helping to cement the company's search leadership.

Second, device manufacturers will be able to license the Google mobile application suite separately from the Google Search App or the Chrome browser.

New commercial agreements will also be supported for "non-exclusive pre-installation and placement" of both the Search app and Chrome. Alphabet, Google's parent company, makes nearly 90 percent of its $100 billion in annual sales from search and advertising.

"We have confirmed to the European Commission how we will comply with its recent decision on Android", said Al Verney, a spokesperson for Google in Brussels. The new rules will come into play from October 29, though the fees will only apply to new smartphones and tablets launched in the EEA. The company has not specified the amount of the licensing fees.

This could have the rather nasty knock-on effect of hardware makers passing on the cost of forking out for a license on to consumers in the way of hiked up more-expensive smartphones phones.

But one outcome of the move, Google said, was that manufactures would face a new fee.

This will also hopefully appease Google competitors which complained the current business model stifled competition to such an extent other products couldn't even hope to compete.

First and foremost, Android will remain open source and device makers will be allowed to tweak the software to their own specifications.

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