Google a couple of days ago announced that it would charge Android manufacturers to use its app suite in Europe. According to documents obtained by ‘The Verge,’ a confidential fee schedule shows the cost as high as $40 per device to install the “Google Mobile Services” suite of apps, which includes the Google Play Store.
Furthermore, the new fees vary depending on country and device type, and it would apply to devices activated on or after February 1st, 2019. Alternatively, manufacturers can choose not to pay the fee as Google is also offering separate agreements to cover the licensing costs for companies that choose to install Chrome and Google search on their devices, according to sources.
Google’s licensing terms are changing in Europe later this month on account of a European Commission fine over misusing its position and forcing its apps on Android manufacturers. The leaked document said: “FEES VARY BY PIXEL DENSITY, PUTTING HIGHER COSTS ON HIGHER-END PHONES.” EU countries are divided into three tiers, with the highest fees coming in the UK, Sweden, Germany, Norway, and the Netherlands.
In those countries, a device with a pixel density higher than 500 ppi would have to pay a $40 fee to license Google’s suite of apps. 400 to 500ppi devices would pay a $20 fee, while devices under 400 ppi would pay only $10. In some countries, for lower-end phones, the fee can be as little as $2.50 per device. It’s unclear why pixel density is so central to the pricing scheme, but it is likely being used as a proxy for the price of the overall device. As for tablets, the pricing tier is entirely different and is capping out at $20 per device.
Beyond offsetting the upfront fees, manufacturers that don’t preinstall Chrome could also miss out on search revenue from the browser. According to the new agreement, Google would not pay search revenue sharing for devices that do not preinstall Chrome and place it in the phone’s home screen dock. “If the Company elects not to place the Google Chrome browser on the Application Dock for any Qualified Device(s) supplied into the EEA [European Economic Area],” the agreement reads, “Company will not be entitled to any portion of revenue generated from Google Chrome for such Qualified Device(s).”