Google to charge Android OEMs as much as $40 per phone in EU

Google's Building 44, where Android is developed. (credit: Ron Amadeo)
We're still seeing the fallout from the European Commission's $5 billion antitrust fine against Google. Earlier this week, Google announced it would comply with the ruling by unbundling the Google Android app package, allowing OEMs to skip Chrome and Google Search in favor of alternatives. The catch is that, since ad revenue from these Google services was used to support Android development, Google will start charging device makers that license Google apps but choose the unbundled route.
Now, thanks to a report from The Verge, we're getting an idea of just how much this more flexible app licensing scheme will cost OEMs. Citing 'confidential documents' that were shown to the site, The Verge says Google will charge device makers as much as $40 per device if they don't use Google's preferred Android setup. The pricing is flexible based on the country and the pixel density of the device's screen. The EU is split into three tiers, with the UK, Sweden, Germany, Norway, and the Netherlands in the most expensive tier. Lower-end phones in bottom-tier countries can cost as little as $2.50 per device. Android tablets, if any of those still exist, get their own pricing tier that is even across all countries and caps out at $20. It all sounds very complicated, but if we imagine this pricing structure applied to the $720 Galaxy S9 sold in the UK, slapping on the top-end $40 fee works out to a 5.5 percent price increase and a $760 phone.
That's not the only spot in Android OEMs' wallets Google will hit. If OEMs don't pre-install Chrome, the report claims they will no longer get a share of search revenue generated by Chrome users. The report says the new rules will kick in February 1, 2019, which is strange given that Google's new licensing rules from earlier in the week start at the end of the month.
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