How will Google’s new Android app licensing rules in Europe impact Chrome and search?

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On Tuesday, Google took action to comply with the European Commission’s (EC’s) antitrust decision requiring it to de-couple Google Play access for smartphone makers from the pre-installation of Google apps such as Chrome and search. Google is appealing the EC’s roughly $5 billion Android antitrust fine, imposed in July.

Despite the appeal, Google was compelled to comply with the EC decision within 90 days or face additional fines, which could have amounted to $15 million per day under a penalty formula.

The changes Google is making to the EU Android ecosystem. In a blog post yesterday Google explained the new framework it will implement for device makers in the roughly 30 country European Economic Area:

• Android partners wishing to distribute Google apps may also build non-compatible, or forked, smartphones and tablets . . .
• [D]evice manufacturers will be able to license the Google mobile application suite separately from the Google Search App or the Chrome browser . . . we will introduce a new paid licensing agreement for smartphones and tablets shipped into the EEA.
• [W]e will offer separate licenses to the Google Search app and to Chrome.

Device makers will now need to pay for Google Play. Smartphone manufacturers can now build their own app stores or use any third party app store on Android devices they make. The only place where this is happening in a meaningful way is China. But we could see more “forked” versions of Android, such as Amazon’s FireOS start appearing in Europe next year.

These rules will not apply in the US or other regions globally.

If companies such as Samsung want to use Google Play they will now pay for it. The amount of the licensing fee has not be disclosed. The Chrome browser and search app are separate but will be subject to a free license.

Any handset maker in Europe could use a third party app store but still offer Chrome and search. They could equally make another browser the default or pre-install other search apps. Device makers could thus strike pay-for-play deals with new browsers (e.g., Opera, Firefox, Microsoft) or search apps that offer revenue for placement or pre-installation or ad clicks.

How it could affect marketers. It’s unlikely that we will see multiple new versions of Android appear in Europe, although there will probably be some that appear. If this does happen Android app developers’ lives could become more complicated, with different versions of Android to address.

Handset makers are likely to be cautious, not wanting to impact sales with buggy or untested versions of Android or app stores. However, we are likely to see other browsers gain some share in Europe, though Chrome will remain the most widely distributed.

Search will probably see a very limited impact, if any. Google dominates mobile search in the EU, and it’s highly unlikely that there will be any meaningful challenger emerge (even Bing) or significant change in consumer behavior.

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