back to article So, about that Google tax on Android makers in the EU – report pegs it at up to $40 per phone

Google will charge Android smartphone makers wishing to include its Play Store as much as $40 in Europe, according to documents purportedly seen by The Verge. The fees are a response to the European Commission's request for a remedy after fining Google €4.34bn in July for "[using] Android as a vehicle to cement the dominance …

  1. airbrush

    Time to ban Google outside of America?

    If ever there was a company that's abused its position..

    1. Gio Ciampa

      Re: Time to ban Google outside of America?

      Can't imagine the EU will ban them outright - not when there's (potentially) a semi-regular source of big fine income they can impose...

    2. Anonymous Coward
      Anonymous Coward

      Re: Time to ban Google outside of America?

      If ever there was a company that's abused its position..

      Why? It's nothing new - so far, they have been following the Microsoft playbook to the letter, including calmly ignoring any applicable laws until they got some frankly pathetic fines in an attempt to stop them. I'm just waiting for them to "generously" offer charity to countries as long as they make Google mandatory for their IT infrastructure. If they found a way to directly milk money out of schools as Microsoft did there could even be a knighthood in it for them once they then "donate" some of it (read: give back a measly percentage of the loot - which they'll probably write off against the minimal taxes they pay)..

      1. overunder

        The random 10, 20, 40 pricing seems just that... random (and high). This whole problem would be less sticky if there was a GNU/Linux or *BSD mobile equivalent, but there isn't. We could talk dollars and market share, but why isn't the IT industry taking about a serious alternative?

        Feel the love of Google, the Microsoft of mobile.

        (Posted from 1 of 2 options, my Android phone)

        1. Updraft102 Silver badge

          (Posted from 1 of 2 options, my Android phone)

          I posted this from number six or so from those two options.

        2. Anonymous Coward
          Anonymous Coward

          "We could talk dollars and market share, but why isn't the IT industry taking about a serious alternative?"

          i wouldve thought it was painfully obvious what with ${current_year} being the 'year of the linux desktop' for about 20 years running.

          there will never be a 'serious alternative' that isn't encoumbered with this kind of commercial tie-in. because there's no money to be made in it. once there's no commercial benefit to building the tie-in, there'll be tons of free/unlicenced solutions, most of them supporting a globally recognised standard to enable interoperability.

          this isn't going to change because its a problem beyond the means of the IT industry to solve. it requires policy and a change in consumer behaviour.

        3. John Brown (no body) Silver badge

          "The random 10, 20, 40 pricing seems just that... random (and high). "

          That was my first thought too. WTF has pixel density/resolution got to do with the pricing for Playstore?

          1. David 164 Bronze badge

            They had to find a way to distinguish between low, mid and high range of android phones.

        4. David 164 Bronze badge

          Because IT industry just likes what works and Android works brilliantly, so why waste time reinventing the wheel when the real money is in creating games such as candy crush.

      2. Pseu Donyme

        Re: Time to ban Google outside of America?

        > ... charity to countries ... to directly milk money out of schools ...

        Google's involvement in education with Chrome OS and/or a package of services such as Google docs / gmail etc. would seem just such a thing. While there may be no money from this directly, the rationale of herding children into the system be exploited later is obvious enough.

    3. Jtom Bronze badge

      Re: Time to ban Google outside of America?

      Go ahead and ban Google in America, too. They have used their search engine results to misinform people far, far too many times. The youth are now extremely ignorant on many issues.

      1. Anonymous Coward
        Anonymous Coward

        Re: Time to ban Google outside of America?

        The youth are now extremely ignorant on many issues.

        But, but, that means they can have a shot at the presidency. Well, if they come from an entitled background, of course..

        1. Anonymous Coward
          Anonymous Coward

          Re: Time to ban Google outside of America?

          Surly the reply to all of this is to launch an "open" version of PlayStore. Once a couple of larger manufacturers do this the DEVs will want to launch there too as it's a no cost option for them if done right.

          In fact I've already used other sources..... but don't tell Google....

  2. msknight Silver badge

    The thing that annoys me....

    ... is that a manufacturer had to do this to their entire product range.

    Hopefully, they'll have the chance to apply the free bundle to some of their range, and experiment with other parts of their range. mix and match, and test the waters. If the free part comes with a stipulation that the entire range has to use the google service to qualify... then we're back to square one.

    1. nematoad Silver badge
      Unhappy

      Re: The thing that annoys me....

      I don't think that that will happen.

      The marketing droids and the bean counters will stop any such attempt in its tracks. The safe way is to do Google's bidding and pass the cost onto the customers. After all if everyone is doing it who will the punters turn to?

  3. Anonymous Coward
    Anonymous Coward

    Let Google be on this one ..

    .. and instead, nail them to the wall with GDPR. That is at present the mechanism with the highest fine for companies like Google - it is no accident that Brussels had to deal with a veritable infestation of US lobbyists over the years, trying to weaken EU privacy laws.

    1. Charlie Clark Silver badge

      Re: Let Google be on this one ..

      I think Google saw GDPR coming, quickly realised it couldn't stop it and started work on how to work with it by getting people to agree to give it all their data. I think we'll see something similar here.

      Where the lobbyists are particularly active (and more succesful) is tax legislation. Tax avoidance is worth $$$ to all these "asset light" companies.

      1. Danny 14 Silver badge

        Re: Let Google be on this one ..

        gdpr is only breached if you dont agree to givong the data and they are using the data for means outside what was agreed or acceptable.

        make a gmail account and there goes your agreement. use the gmail account to log into google services and thats a lot of scope for legitimate use.

  4. Duncan Macdonald Silver badge
    Mushroom

    iCOMP

    Main backer Microsoft (which runs the third rate Bing search service among its other products).

    Is it surprising that they complain about Google ?

    1. graeme leggett Silver badge

      Re: iCOMP

      And Google would drop Microsoft in the hot water the moment they found some dirt on them.

  5. Joe Harrison Silver badge

    why do we need app stores?

    I successfully used Microsoft Windows for several decades without needing an App Store. If I wanted an app (we called them applications back then) I bought it from someone who made applications. Sometimes it even came in a snazzy box. Why do I need to buy my Android apps from Google?

    1. Chris Miller

      Re: why do we need app stores?

      You don't - it's just more convenient (for both the purchaser and vendor) to do it that way.

    2. Anonymous Coward
      Anonymous Coward

      Re: why do we need app stores?

      Yes but did you go round installing any old .exe? It gives at least some security, plus users don't want to be having to search high and low for apps. It doesn't work on computers because those with the software don't want to be in a walled garden. Also, could you imagine a world with phones without apps stores? You think you are the family and friends IT person now, wait till something won't install or you have compatibility problems with the phone or they installed something they shouldn't have.

      1. Updraft102 Silver badge

        Re: why do we need app stores?

        Also, could you imagine a world with phones without apps stores?

        I don't have to imagine it. I can remember it! It was wonderful.

      2. LDS Silver badge

        "Also, could you imagine a world with phones without apps stores?"

        Yes, my first smartphone well predated the iPhone, and it worked perfectly without an app store. Just download the application and tap the file to install it...

      3. JohnFen Silver badge

        Re: why do we need app stores?

        "It gives at least some security"

        Not enough, though, which is worse than no security, given that "security" is something Google constantly harps on as a benefit of the app store. The problem with it being so insufficient is that the very users that this would benefit are also the ones who will feel that if they get it from the app store, it is safe -- so they are less likely to be cautious about what they will and will not install.

    3. This post has been deleted by its author

      1. LDS Silver badge

        "the savvy user always had to fuss with anti-malware"

        The savvy user never installed something from wharez sites... nor perused them to find "free" software.

        Then there are the users who needs the full Photoshop to make changes they could do in Paint, and of course don't want to pay for it.

        1. Dave 126 Silver badge

          Re: "the savvy user always had to fuss with anti-malware"

          Another naughty thing is how many apps on Google's Play Store have been found to contain malware. If Google were to properly scrutinise each app submitted for entry to the Store, it would a little way to justify their 30% cut.

        2. Persona

          Re: "the savvy user always had to fuss with anti-malware"

          That savvy user never revisited the vendors site to get security patches either, not that they would have found any had they tried. The only common recourse back then was to buy the next version which might or might not have security patches applied. App stores for all their faults do at least provide a mechanism to allow important security patches to be pushed out to the customers.

          1. 404 Silver badge

            Re: "the savvy user always had to fuss with anti-malware"

            Patches? What patches? Didn't need no stinkin' patches - I had a Nokia...

            Be happy you're alive because I never dropped it through the Earth's core ending all life...

            ;)

    4. Apprentice

      Re: why do we need app stores?

      You're comparing apples to oranges. The app store is essential for mobile platforms.

  6. Andy The Hat Silver badge

    I can't quite understand how the charging model can be based on the resolution at which you view a jpg of a cat. A physically bigger unit with more pixels (so you can see the entire pussy) but a smaller dpi (still beyond the resolution of human vision at a foot) costs less ... Marketing is a wonderful thing.

    1. Anonymous Coward
      Anonymous Coward

      >I can't quite understand how the charging model can be based on the resolution at which you view a jpg of a cat.

      You forget Microsoft's various attempts at charging based on screen size:

      https://www.theverge.com/2014/4/2/5574146/microsoft-making-windows-free-on-devices-with-screens-under-nine

      There was also the slashing of prices for XP when Linux netbooks came out for devices with smaller screens and farty processors.

      Why do you think all those W10 devices came with 32GB SSD and 2GB RAM ?

      The licences are cheaper for shittier specced HW.

      1. MiguelC Silver badge

        I think licensing should cost more on shittier specs... vendors should be penalized for the worse experience you get, not just consumers!

      2. LDS Silver badge

        You forget Microsoft's various attempts at charging

        At least MS attempted to charge less, not more...

    2. herman Silver badge

      "see the entire pussy" The whole internet is about pussy. It is no use trying to pussyfoot about it.

      1. DougS Silver badge

        They use dpi as a proxy for price

        Rather than up front saying "we want OEMs selling more expensive phones to pay us more for the same thing" they've linked it to dpi. Same thing, but doesn't sound quite as shady.

  7. Charlie Clark Silver badge

    Fail to be outraged

    Personally I think that the biggest problem has been the secret contracts that Google was able to force on companies. This is very similar to the discounts Microsoft offered to PC makers if Windows was installed on every machine: the discount was paid for by effectively eliminating the competition.

    I don't expect the ruling to change the world overnight but I do expect improvements, including alternative app stores, over time.

    Things that still need looking at by regulators:

    • timely release of security updates and strict liability otherwise
    • Google's T&Cs for GMS
    • Apple's T&Cs for developers including synthetic product restrictions

    1. heyrick Silver badge

      Re: Fail to be outraged

      "Things that still need looking at by regulators"

      The idea of installing an update with a single "Accept" option for a huge 40-screenful licence. And no "I disagree" option without rendering your device useless (hello Apple, I'm looking at you).

      The idea of requiring you to accept data slurp in order to use built in functionality of your device. I understand WiFi mobile calling needs GPS to have a location in case you call the emergency services. What I don't understand is why this location is being sent to Google (as the pop up notification says).

      There should be "no, I don't agree" options that don't render primary functionality useless.

      1. I ain't Spartacus Gold badge

        Re: Fail to be outraged

        heyrick,

        Doesn't GDPR already cover that? They're asking for your data in order to perform a service that doesn't require it - and the alternative is no service. Which as I understant it breaks GDPR.

        You're allowed to do a no data / no service take-it-or-leave-it, but the legislation says that shouldn't be done by consent. But you get the permission for the data to be held on the grounds it's required for the service. Which means you've no consent if the data isn't required. Whereas using the permissions model, you're not allowed to do the take-it-or-leave-it thing, you have to request the data and have refusal as an option.

        Or does that fall under the heading of "how this law is supposed to operate" rather than how it's actually been written?

        1. Charlie Clark Silver badge

          Re: Fail to be outraged

          Doesn't GDPR already cover that?

          More or less, but I think heyrick is based in the US. Lots of countries in the EU already do not consider clickthrough contracts, that software companies love to force on people, to be valid.

  8. Anonymous Coward
    Anonymous Coward

    Well it gives manufacturers to do a number of options:

    * Fork AOSP and created their own OS, just not calling it Android but essentially the same without Play Services. Then include whatever search, apps etc they want and charge the supplier for them.

    * Use Android as is from Google and pay the $10,$20,$40 but get choice over browser or search - potentially getting more from another supplier than $10-$40 for including their browser and Search

    * Use Android as is for free but have no chance of getting extra cash from someone else for their search engine on the phone.

    So there are a number of choices, however I feel it would be a bit too far to expect Google to produce the OS and all the work that might go in to that and you can then just allow another supplier to supply all the money making bits for no extra work.

    It will be interesting where Play Services falls into all this, as if they are not included in the free bundle then there could be significant usability issues for Android without it.

    I think the better solution would be a fee for Gapps/Android and then open market for search and browser - preferably even user choice.

    Also quoting iComp? Seriously, this is like when you used to quote Florian Mueller on SCO and Oracle lawsuits. Choose an independent analyst or state their conflict on articles!

  9. MiguelC Silver badge

    About the free bundle option

    The option of paying for half or getting the full bundle for free seems to stand on shaky grounds, as it's just a way of circumventing EU's action (and I'm guessing the EU would see it just as it is).

    Let's wait and see if Google is just throwing ideas around to see the reactions or if it's the real deal.

  10. Doctor_Wibble
    Flame

    That's my phone nearly doubled in price then

    My super el cheapo smartphone cost an outrageous 49.99 and I doubt this extra charge will suddenly remove all those 'your device is incompatible' notices the Play Store puts on apps that turn out to run just fine.

    What about custom hardware? Would that be cheaper for Play Store access, or will there be some extra high premium charge for anything made from a small aubergine?

    1. Gonzo wizard

      Re: That's my phone nearly doubled in price then

      Those 'your device is incompatible' notices are configured by the developer specifying the range of supported Android versions, among other things. They have nothing to do with Google themselves, unless of course it is a Google app.

      1. Doctor_Wibble

        Re: That's my phone nearly doubled in price then

        > Those 'your device is incompatible' notices are configured by the developer

        I had wondered - obviously I'm still completely outraged at this devastating tragedy and will be writing weekly letters to my local paper about it just as soon as I find my green ink.

  11. Anonymous Coward
    Anonymous Coward

    What did people think would happen?

    This of course was always the inevitable outcome. You buy a phone that costs £40 more, and have to download Chrome and Google Search, just like every iPhone owner already does today.

    Thanks EU. plonkers.

    1. Charlie Clark Silver badge

      Re: What did people think would happen?

      This of course was always the inevitable outcome.

      You are the mysterious and enigmatic Mystic Meg and I claim my £5!

      No need for anyone to report on this stuff in the future when we can just ask you, eh?

    2. I ain't Spartacus Gold badge

      Re: What did people think would happen?

      Anon,

      You may be correct. Google may be allowed to get away with taking the piss. Or, the Competition Commissioner may rule that this remedy is also an abuse of market power. In which case we go back to the start, do not pass Go do not collect €200. We shall see.

    3. Zolko

      Re: What did people think would happen?

      @AC : have to download Chrome and Google Search

      I don't use any of them. And no Maps either. I'd be happy to pay more for a Google-free phone, so I very much welcome this decision (if it's for real !!!)

      1. Anonymous Coward
        Anonymous Coward

        Re: What did people think would happen?

        "I'd be happy to pay more for a Google-free phone"

        You press Cancel during initial setup. Can you even read basic instructions?

  12. xanda

    Mo' money

    "...amazing how they always find a way to turn a remedy into a new source of profit..."

    Sure they will make a bit of extra cash - the sharpest organisations will always try turn a bad deal into a good one.

    As for how much extra: Well that remains to be seen. Android devices generally follow the high volume/low margin model so it's hard to see how much they can squeeze out of vendors already wafer thin margins. Besides, Google will want to consider if their dominance would be compromised by pricing their main method of reach out of the market.

    Can't see them wanting to do that somehow.

    1. I ain't Spartacus Gold badge

      Re: Mo' money

      That's why you make the price high. Then the vendors still have no choice but to bundle all services together, and that bit where the report says Google may offset all or some of the fees if you bundle search and Chrome suggests they hope to go back to secret deals to force OEMs to go all Google on all their product range. Will be interesting to see if the Commission accept this as a legit remedy, or make Google do it again.

  13. LenG

    Locked out forever?

    So, if I buy a phone without the Google App store installed, does that mean that Google will not make the App store available to me? I don't believe that ... they would be breeding a race of Goole-resistant consumers. More likely there would be a way to download (or purchase) the App store and, if purchased, I would be the cost would be less than $40 ... more like $4 for the app store and a free (crappy) game.

    1. Gonzo wizard

      Re: Locked out forever?

      That's right, it won't be available to you from Google - they only distribute apps, and updates, through the app store. Which you don't have. Sideloading a copy grabbed from another device might work, but seeing as the phone you are installing it on won't have been developed with compatibility with the app store (and the essential Play Services) in mind, I'm guessing that your experience will not be a happy one.

      If you a re really unlucky the Play Store might even check your phone's model number and block it on the basis that the manufacturer hasn't paid the necessary.

    2. Duncan Macdonald Silver badge

      Re: Locked out forever? - NO

      The Google Play Store apk has been available for a long time - grab the latest version onto the phone and run it to install Play Store.

      (Google wants as many people as possible to use the Play Store so they make it easy to install on Android phones that do not have it (some of the Chinese builds).)

      1. Spazturtle Silver badge

        Re: Locked out forever? - NO

        Side loaded Play Store now checks if the device is certified or not. So no, if you device is not certified you won't be able to side load GApps onto it.

        1. Anonymous Coward
          Anonymous Coward

          Re: Locked out forever? - NO

          How come it still works on Amazon Fire devices?

          Updated it last night still works.

  14. ratfox Silver badge
    Paris Hilton

    What I find weird is that all of these apps are available for free, and yet Google thinks that phone makers are willing to pay them $40 to have them pre-installed. Which kind of implies that users will choose a phone that is $40 more expensive rather than just installing those apps themselves. Which takes like 5 minutes, tops.

    Another interesting thing is that Google has been apparently sharing ad revenue with the phone manufacturers. I wonder if they do that with Apple, or if they just pay the reported $9B and keep the ad revenue?

  15. Pseu Donyme

    This is just exploiting their dominating market position in a different way i.e. placing an extortionist price on a key bit of Android infrastructure (Play Store) Google has managed to monopolize* while pushing their other wares and services on the side, and, moreover, making that so expensive that it is still really a non-option. An indication of how perverted the market** here has become is that Google can even contemplate to ask for an extra fee for including something that is actually their biggest direct source of income from Android: under any sort of normal circumstances *they* would be paying to make sure that sort of thing got as wide distribution as possible.

    * in general an app store is a natural monopoly waiting to fall to some monopolist because of the self-amplifying feedback loop of: more users -> more developers -> more apps -> more users ... this time it didn't take much effort on Google's part as they got to ship theirs as the only option with every Android phone and competition never emerged before it was too late

    ** not really a market, at least not in the sense that a market is supposed to be something where vendors compete for the favor of customers, instead a complex tangle of cross-subsidied products and services where competition has no realistic change of emerging

  16. DougS Silver badge

    Somehow I think the EU is going to reject this "remedy"

    At least when Microsoft said "OK, we will offer a version of Windows without the stuff you have a problem with" they did it at the same price. Google wanting to go from free to $40 is not likely to fly...

    1. bazza Silver badge

      Re: Somehow I think the EU is going to reject this "remedy"

      Who knows. Even if the EU doesn't reject this remedy, Google have potentially opened themselves up to yet another probe, eventually. By charging money, they've defined the business case for a competitor to come in and provide equivalent services (even down to the API level - fair use, right?). That competitor can say, "here's equivalent services, minus the data slurp, for $30", undercutting Google who are saying it's $40 + data slurp. Which would you take, all other things being equal? I agree that, in the round, it isn't going to fly at all well.

      Suppose that did happen, and got traction. Google's only recourse is to undercut the competitor's $30. Which could easily be taken as an abuse of monopoly, given Google's current position in the Android services supply market. They could try obfuscating the APIs, but that won't fly either.

      1. DougS Silver badge

        Re: Somehow I think the EU is going to reject this "remedy"

        If I used Android, I'd pay be willing to pay the full $40 - hell three times that - for a guaranteed slurp free experience. A mere $10 difference would be a huge bargain!

      2. ratfox Silver badge
        Holmes

        Re: Somehow I think the EU is going to reject this "remedy"

        they've defined the business case for a competitor to come in and provide equivalent services (even down to the API level - fair use, right?). That competitor can say, "here's equivalent services, minus the data slurp, for $30"

        The things that they are charging $40 for include YouTube and Google Maps. You can provide an equivalent API, but good luck providing equivalent data behind the API.

        1. DougS Silver badge

          Re: Somehow I think the EU is going to reject this "remedy"

          Considering both are free on the web, I'm not sure why you need them built into your phone at all - certainly not why you should pay $40 to get them as an app instead of bookmark.

          1. ratfox Silver badge
            Devil

            Re: Somehow I think the EU is going to reject this "remedy"

            Considering both are free on the web, I'm not sure why you need them built into your phone at all - certainly not why you should pay $40 to get them as an app instead of bookmark.

            Well then I guess the phone makers won't have to pay Google $40. Problem solved. What are people complaining about?

        2. Sandtitz Silver badge
          Go

          Re: Somehow I think the EU is going to reject this "remedy"

          "The things that they are charging $40 for include YouTube and Google Maps. You can provide an equivalent API, but good luck providing equivalent data behind the API."

          Youtube works quite well on my Firefox Focus, just like I use Youtube via a web browser on my PC.

          Google Maps, do they allow offline maps these days? I'm pretty happy with the competition: HERE WeGo has the stupidest name ever but that and say, Maps.me work pretty well.

          I certainly have no problems having a Google-free phone.

  17. David 164 Bronze badge

    The laws of unintended consequence are absolutely brilliant. Not only has the EU raise prices for consumers they will have undoubtedly made buying a mobile phone a more complicated process in the future.

  18. Mark2410

    Well, in China...

    they don't use the Play store nor do then have to follow Googles rules about how apps must behave. The result is that apps run constantly, everything runs. The Chinese version of Uber (Didi) despite my never having used it would by lunch time have consumed 40% of my phones battery by forcing gps and location tracking to be on permanently. They all behave like this in China. Trust me in this case I want Google being the benevolent overload as the alternative is just awful.

    1. Anonymous Coward
      Anonymous Coward

      Re: Well, in China...

      You're essentially right in your description, but remember, the Chinese market is different, for more than one reason.

      As an example. Windows Update was never banned there, and yet, there were widely distributed versions of Windows modified with an alternate Update source to be able to patch them without a valid license (the first time I saw one, my mind boggled).

      I think the lack of consumer protection there is the biggest issue, and that is a really big difference with the European market. The crap you're describing would get companies in hot water quickly on this side of the GFW.

  19. Kris Sweeney

    Apple and MS

    Can we see similar anti-trust cases against Apple and Microsoft for their stores, Siri and Cortana?

    1. Spazturtle Silver badge

      Re: Apple and MS

      What company is Apple forcing to put the Apple App Store on their devices?

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