Google might have to start charging for Android operating system

Google could be forced to start charging for its Android operating system after the record-breaking $5 billion EU fine, company warns

  • Google CEO Sundar Pichai made the comments on the company’s official blog  
  • Android is currently free for any phone manufacturers to use on their devices
  • This saves them the heavy cost of developing their own proprietary software
  • This model has dramatically slowed the once-meteoric rise of the Apple iPhone
  • If Google charge for the software, it could lead to more expensive handsets
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Google CEO Sundar Pichai has warned the company may be forced to start charging for its Android mobile operating system in the future.

The warning comes in the wake of a $5 billion (£3.8bn / €4.3bn) fine levelled by the EU, which charged Google with freezing out rival technology firms from its smartphone software, particularly in advertising.

Android is the most popular mobile operating system on the planet, with more than 2 billion monthly active devices worldwide.

Google currently provides its Android software to smartphone manufacturers for free, saving them the cost of developing their own operating systems.

This has dramatically slowed the once meteoric rise of the market’s main player, Apple’s iPhone, and led to a more diverse smartphone marketplace.

In return, Google is able to serve targeted advertisements to Android smartphone users, and make money from digital purchases made in the Play Store.

Should Google start to charge for the operating system, it could lead to increased costs for phone makers, which will likely be passed on to consumers.

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Android fans may be in for a shock after Google’s CEO suggested that the open source platform may have to be paid for in the future. The move comes in the wake of a $5 billion (£3.8bn / €4.3bn) EU fine to Google for freezing out rival firms from its smartphone software

Writing on the company’s blog, Google CEO Sundar Pichai said: ‘So far, the Android business model has meant that we haven’t had to charge phone makers for our technology, or depend on a tightly controlled distribution model. 

‘But we are concerned that (the EU’s) decision will upset the careful balance that we have struck with Android, and that it sends a troubling signal in favor of proprietary systems over open platforms.

‘(This) decision rejects the business model that supports Android, which has created more choice for everyone, not less. We intend to appeal.’

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When levelling its record-breaking $5 billion (£3.8bn / €4.3bn) fine, the EU had no instruction as to how exactly Google should solve its app bundling violations.

However, if smartphone manufacturers are able to preinstall their own web browsers instead of Google Chrome on new Android handsets, it’s likely to have serious implications for the US search company.

As it stands, mobile advertising revenue accounts for more half (67 per cent) of Google’s net digital ad revenue, which is likely to take a hit if the company’s software is not the default on popular Android smartphones.  


Android’s appeal is that a vast array of smartphone manufacturers, including Google (Pixel 2 pictured), are free to run the operating system on their handsets, saving them the cost of developing their own

WHY HAS THE EU FINED GOOGLE $5 BILLION? 

Google has been slapped with a $5 billion (£3.8bn / €4.3bn) fine from the EU.

It was levelled by the EU Competition Commissioner Margrethe Vestager at a press conference on Wednesday July 18.

The EU has charged Google with shutting-out competitors by forcing major phone manufacturers including South Korea’s Samsung and China’s Huawei to pre-install its search engine and Google Chrome browser by default.

Google currently provides its Android software to smartphone manufacturers for free, saving them the cost of developing their own operating systems. 

In return, Google is able to serve targeted adverts to Android smartphone users, and make money from digital purchases made in the Play Store.

Google is also able to run advertisements inside some core applications within the Android mobile operating system — like the Play Store app marketplace — something rivals are not permitted to do.

Google’s own Play Store, which is used to distribute television shows, movies, applications, and ebooks, accounts for more than 90 per cent of all software downloaded on Android devices in Europe. 

The EU believes this monopoly within Android provides an unfair advertising advantage to the company.

The EU conducted a three-year investigation into Google, which found the Mountain View-based company was using its Android operating system to marginalise rivals.

The crux of the issue is the monopoly Google has garnered within the Android app marketplace and the advertising advantage this provides the company.

Google is able to run advertisements inside applications pre-installed with the Android mobile operating system — something rivals are not permitted to do.

Mr Pichai suggests that the average Android user installs around 50 apps themselves and are able to easily remove preinstalled apps. 

If Google is prevented from bundling its own apps with Android handsets, however, he warns that this will disrupt the balance that allows the firm to offer the operating system software to competitors for free. 


CEO Sundar Pichai has argued that ‘a healthy, thriving Android ecosystem is in everyone’s interest’ and points to the wide array of brands, devices and apps that have been developed for the open-source platform

Mr Pichai suggests that the average Android user installs around 50 apps themselves and are able to easily remove preinstalled apps 

Mr Pichai argued: ‘Today, because of Android, a typical phone comes preloaded with as many as 40 apps from multiple developers, not just the company you bought the phone from.

‘If you prefer other apps — or browsers, or search engines — to the preloaded ones, you can easily disable or delete them, and choose other apps instead.

‘This is in stark contrast to how things used to be in the 1990s and early 2000s—the dial-up age. The free distribution of the Android platform, and of Google’s suite of applications, is not only efficient for phone makers and operators — it’s of huge benefit for developers and consumers.

‘If phone makers and mobile network operators couldn’t include our apps on their wide range of devices, it would upset the balance of the Android ecosystem.’

WHAT ANTITRUST CASES HAS GOOGLE FACED IN EUROPE?

July, 18 2018 – EU antitrust regulators hand down a $5 billion (£3.8bn / €4.3bn) fine to Google after a three-year long investigation.

June 27, 2017 – EU fines Google $2.84 billion (£2.1bn / €2.42bn) for thwarting rivals of shopping comparison websites.

July 14, 2016 – EU sets out another charge against Google’s shopping service. It also accuses the company of preventing third parties using its Adsense product from displaying search advertisements from Google’s competitors – a third case against the company.

April 20, 2016 – EU sends a charge sheet to Google outlining the company’s anti-competitive practices with regard to Android smartphone makers and apps makers.

April 15, 2015 – EU charges Google with blocking competitors of its shopping service.

Sept 2014 – Joaquin Almunia says he will not be able to wrap up the Google case before his mandate ends in October.

May 2014 – Joaquin Almunia, European Competition Commissioner at that time, says feedback from complainants will be crucial to determining whether he accepts Google’s concessions.

Feb 5, 2014 – Google improves its concessions related to online search.

2013 – Lobbying group FairSearch files a complaint about Google’s Android business practices to the European Commission.

April 25, 2013 – EU seeks feedback from rivals and users to Google’s concessions.

April 3, 2013 – Google offers concessions related to online search and its AdSense advertising network to address EU competition concerns, without admitting wrongdoing.

Nov 30, 2010 – European Commission opens investigation into allegations that Google has abused its dominant position in online searches following 18 complaints.

Nov 3, 2009 – British price comparison site Foundem complains about Google’s online search to the European Commission.

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