Google charging Android device makers up to $40 per phone to install apps

Google announced on Tuesday it will be updating the terms of licensing agreements it makes with Android device producers to allow them to pre-install the Google Play Store and other essential apps on hardware shipping in Europe. The move, to appease an antitrust ruling by the European Commission, means that the free licenses will cease in favor of paid versions.

According to documents received by The Verge, the fee schedule indicates the cost per device could be as high as $40 in order to install "Google Mobile Services," a selection of core Google apps that includes the Google Play Store, for devices activated on or after February 1, 2019.

EU countries are split into three tiers, with the highest consisting of Germany, the Netherlands, Norway, Sweden, and the United Kingdom. For these areas, smartphones with a screen pixel density of 500ppi or more will need to pay $40 to license the apps, reducing to $20 for between 400 and 500ppi, and $10 for sub-400ppi displays. For other tiers, the cost per device could reduce down to $2.50.

Tablets have a more even pricing scheme that is the same across all of the affected countries, charging as much as $20 per device. While vendors would be able to negotiate deals with Google, a source suggests there would be little in the way of variance from what is detailed in the schedule.

The source also suggested that separate agreements would be offered for vendors installing Chrome and Google Search on their products, which could lower the fee or, in some cases, remove it entirely.

Firms who do not pre-install Chrome on their hardware and add it to the home screen dock could also lose another source of revenue, as they would not be eligible for search revenue sharing when users use Google. The revenue sharing incentive has been available for quite some time, and in this case would be useful for vendors to keep using, in order to cover part of the cost of the app suite licensing fees over time.

Google's changes were made following an investigation by the European Commission into its app licensing practices, where the company required vendors to pre-install Google Search and Chrome as a condition of accessing the Google Play Store. Google also allegedly paid major device producers and carriers for exclusively pre-installing the Google Search app.

The Commission fined Google $5 billion, and demanded changes to the licensing scheme within 90 days. The regulator believed Google used Android "as a vehicle to cement the dominance of its search engine," effectively making it extremely difficult for other firms to compete on the Google-dominated platform.

Also as part of the changes, Google will be offering agreements to allow Search and Chrome apps to be installed non-exclusively, with competing apps able to be included on the same device, instead of the previous practice of requiring exclusivity. Other compatibility agreements will allow vendors to produce hardware using forked Android versions, while still allowing them to distribute Google apps.