New Google policy could raise the price of Android phones

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For the first time in its history, Google will no longer force manufacturers to sign agreements related to pre-installing nearly all Google apps.

The European Commission in July hit Google with its biggest ever fine, imposing a 4.34 billion euro ($5 billion) penalty, giving the U.S. tech giant 90 days to change its practices. Since they will stop bundling these apps with Android, the company will start charging a licensing fee to make up for it.

We'll also offer new commercial agreements to partners for the non-exclusive pre-installation and placement of Google Search and Chrome. The crux of the EC's decision earlier this year was its opinion that Google was taking advantage of its position as a dominant operating system to be unfriendly to companies making Android devices. Android device makers could turn to other search engines, including lesser-known ones such as Qwant and DuckDuckGo, which tout their strict privacy practices. But Google explained that its mobile application suite (Play Store, Gmail, YouTube, Maps etc) will require a licence fee if pre-installed on devices shipping to the EEA and a separate licence would be required for Search and Chrome.

In an effort to placate Europe's regulators furious at its anticompetitive tactics, Google has overhauled its Android licensing practices for the continent. The company was also fined about $5 billion. The blog post did not specify which Google software it would sell when the licensing program takes effect on October 29.

The company will also let phone makers install rival versions of Android, the most widely used mobile operating system. "The new arrangement simply changes the implicit exchange of value - access to the Play store in return for preinstalling Google Search and Chrome - into an explicit one", of license fees, said James Cordwell, a financial analyst at Atlantic Equities.

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"The big challenge for phone-makers is to try to replicate the success that Apple has had with monetising its devices after they have been bought, which it has done by selling services such as iCloud storage and Apple Music".

Google is appealing this decision, but in the meantime it is enacting new rules to comply with it.

In short, Google's Search App and Chrome browser are being unbundled from the rest of the the Chocolate Factory's suite of Android mobile applications within the European Economic Area. Google has now filed an appeal against the ruling, continuing to argue that Android helps competition rather than hinder it.

The company plans to charge a fee to all Android phone makers that want to include free versions of its Google apps with the default versions of the Android OS they are shipping in European Union states.