Google reportedly wants to charge EU phone makers $40 for apps like Gmail and Maps

Hollis Johnson/Business
Insider

• Google will ask for $40 per device in “licensing fees” from
  Android manufacturers that want their phones to include Google’s
  app bundle,
  the Verge reports. 
• The fee will differ by country and device, and will cover
  Google’s Play Store, as well as Gmail, YouTube, and Google Maps.
• This is one of the many changes Google is making
  after it was hit with a $5 billion fine for forcing
  manufacturers that wanted access to the Google Play Store to
  exclusively install Google apps.

With a $5 billion antitrust fine looming overhead, we now know
how much Google thinks its popular apps are worth, and what it
wants Android manufacturers to pay for access to them.

Google has put a price tag of $40 on its app bundle,
the Verge reports. This isn’t a cost that you yourself would
have to cough up — it’s
a “licensing fee” that Google will charge European-based
phone makers if they want their devices to run Gmail, Maps,
YouTube, and Google Play, Google’s app store. 

The introduction of such a fee follows an antitrust ruling
earlier this year that found
Google had regularly abused its dominance over the smartphone
market. Google has always offered a paired-down version of
the Android mobile operating system free of charge. But to get
access to Google’s popular Play store, the company required
manufacturers to install Google’s bundle, which included the
Chrome browser and Google Search. Antitrust regulators in
Europe
fined Google $5 billion for its illegal practices.

The licensing fees that Google will charge for its apps will vary
depending on country and device, but will go as high as $40 per
device, the Verge reports. According to documents that the
publication obtained, EU countries are divided into three tiers
to determine how much they should pay (the tier with the highest
fees consists of the United Kingdom, Sweden, Germany, Norway, and
the Netherlands). Fees are then reportedly broken down even
further based on each device’s pixel density — its resolution and
display quality, essentially.

However, the Verge reports that phone manufacturers may be able
to escape some — or all — of these costs if they choose to make
Google’s Chrome web browser and Search engine their device
defaults. In theory, separating Search and Chrome from the rest
of the Google app bundle will let manufacturers sign deals with
other search and browser providers. But Google’s deal to cover
licensing fees may be too sweet to pass up, given the widespread
use of Gmail, Maps, YouTube, and all the other apps consumers
want.

These major changes to Google’s relationship with European-based
phone manufacturers will go into effect October 29.

Here’s a breakdown of all the changes Google is
making:

• Phone makers that want to run Android on their devices will
  no longer be forced to exclusively install a bundle of Google
  apps (Chrome, Search) in order to access Google’s Play Store, the
  most popular app store for Android
• The downside is that Google will now charge phone makers
  licenses for a package of its apps, including the Play Store,
  Gmail, YouTube, and Google Maps. It will charge separate licenses
  for Search and Chrome
• This means phone makers can choose to preinstall apps from
  Google as well as its competitors
• Phone makers are also free to create non-compatible “forked”
  versions of Android and still have access to Google apps —
  previously, this was not allowed
• You can read Google’s
  explanation here.

Get the latest Google stock price here.