Alphabet Inc, Google’s parent company will charge hardware firms up to Ksh4, 000 ($40) per device to use its apps. This will be implemented under a new licensing system that replaces one that the European Union this year deemed anti-competitive. The fee can be as low as Ksh 250 ($2.50) and rises depending on the country and device size. It will be standard across manufacturers, with the majority likely to pay Google around Ksh 2,000 (US$20).
This charge applies to a suite of apps including the Google Play app store, Gmail and Google Maps. However Companies can offset the charge by placing Google’s search and Chrome Internet browser in a prominent position. Under that arrangement, Google would give the device maker a portion of ad revenue it generates through search and Chrome.
The European Commission in July found Google abused its market dominance in mobile software. This was by essentially forcing Android partners to pre-install search and Chrome on their gadgets. The commission levied a record US$5 billion fine. Google has appealed, and the commission has threatened additional penalties unless the company ended its illegal practices.
However, the company says that including Search and Chrome with its other apps funded its development of Android. To offset the lost revenue, it’s introducing a new licensing fee. A device maker that wants to install the Play Store (and the rest of the app suite) on any phones sold in the European Economic Area will have to pay up.
The new system should give Google’s rivals such as Microsoft Corp more room to partner with hardware makers to become the default apps for search and browsing, analysts said.
Qwant, a small French search company that has been critical of Alphabet, said in a statement on Friday that it was “satisfied that the European Commission’s action pushed Google to finally give manufacturers the possibility to offer such choices to consumers”.