Google is unbundling Android apps: all the news about the EU’s antitrust ruling

Google has announced the alternative search engines it will show to new Android users in the EU, with DuckDuckGo the most frequently offered choice and Bing tied for last place.

EU citizens setting up Android devices from March 1 will be given a choice of four search engines to use as their default, including Google. Whichever provider they chose will become the default for searches made in Chrome and through Android’s home screen search box. A dedicated app for that provider will also be installed on their device.

Google has announced that it will start asking European Android users which browser and search engine they would prefer to use on their devices, following regulatory action against the company for the way it bundles software in its mobile operating system. Last year Google was fined a record $5 billion by EU regulators for violating antitrust laws and was ordered to stop “illegally tying” Chrome and its search app to Android.

Google’s initial response was to start charging manufacturers licensing fees for the Play Store and other apps while offering the option to include Chrome and the Google search app in the overall package for free. Now, SVP of global affairs Kent Walker says in a blog post, Google will go one step further by offering users of “existing and new Android devices in Europe” a direct choice of services.

As expected, Alphabet’s core ad business continues to grow at a remarkable pace, with the company’s third quarter earnings announcement coming in well over Wall Street analysts’ expectations on profit, although slightly under sales estimates for the quarter. The company posted revenue of $33.7 billion for the quarter, up 21 percent year over year, with a profit of $9.2 billion, or earnings per share of $13.02.

Much of this growth comes from its Google subsidiary’s ad business — ad revenue accounted for 86 percent of all revenue this past quarter. But Google continues to invest heavily in its cloud division to compete with Amazon’s AWS division and Microsoft’s Azure. It also continues to invest in hardware through its Pixel phones, Chromecast devices, and the expanding Home smart speaker line. Google’s “other revenues” section posted revenue of $4.64 billion, which is up nearly 30 percent from this time a year ago.

The fact alone that Google will start charging in Europe for what one could fairly call “parts of” Android is in itself huge news. The change, announced Tuesday as a result of a European Commission lawsuit, is a major shift in Google’s business model and has the potential to loosen the company’s grip on the search and browser market. It is a big deal.

But of all the changes that this new licensing model could bring, simply charging licensees might not be the biggest. The biggest detail could end up being that Google’s phone and tablet partners — like Samsung, LG, and Motorola — can now offer Android-based phones in Europe without any Google apps and services on them. That’s a huge deal, and if manufacturers are daring enough to try it, it could lead to a substantially different market for Android phones some years down the road.

By the end of the month, Google will charge a licensing fee in Europe for the Play Store and apps like YouTube and Gmail in order to comply with the European Commission’s antitrust ruling. Device makers will soon have to decide whether using Google services is worth the fees, while Android as an operating system will remain free to use. With these new conditions, the future of Android in Europe could dramatically transform, becoming a pared-down version that retains the OS but offers fragmented alternatives to what were once cornerstone Google services.

So what would that look like? The clearest example to point to is in China where Google is outright banned. Instead, each smartphone company (that isn’t Apple) runs some version of Android, but there are over 400 app stores in China in place of the Google Play Store. Of the some 400 stores, 10 capture most of the country’s market share, including Tencent’s Myapp, 360 Mobile Assistant, and Baidu Mobile Assistant. The Play Store (downloadable via a VPN) just manages to squeeze into the top of the list, making up a measly 3 percent of app store installs in July, according to market analyst group Newzoo.

Google is changing the way it licenses its suite of Android apps in Europe, leading the company to charge a licensing fee for the Play Store and other Google apps for the first time.

The changes come in response to a July ruling by the European Commission, which fined the company $5 billion for antitrust violations and ordered it to stop “illegally tying” Chrome and search apps to Android.

Google was hit with a $5 billion fine from the European Commission over Android app bundling yesterday. While the fine is the biggest the EU has ever levied against a single company, it’s the changes to Android that Google now has to make that are far more significant. But they’re probably too little, too late.

Google will now be forced to unbundle its Chrome browser and Google search apps from Android, meaning phone makers won’t have to ship Android phones with these apps preinstalled. Additionally, phone makers will be able to fork the open-source version of Android and still be allowed to also manufacture devices with Google’s Android software, so we could see more competitive variants of Android from big phone makers. Google would never do all of this of its own accord, of course, but it has no choice. It stands accused of using anti-competitive practices with Android to boost its own range of web services.

Google has been hit with a massive $5 billion fine by the EU this week for Android antitrust violations, with the European Commission claiming that Google has been taking advantage of Android to impose its own services — Google search, Chrome, and the Play Store — upon consumers and device makers.

It’s a confusing case, so I’ve taken a few minutes to try to break things down here and answer some of the bigger questions about what’s going on. It might stir memories of Microsoft’s ugly antitrust battle with the US government but there are some differences between the two. Here’s what’s going on with Google and the EU.

The EU’s decision to force Google to unbundle its Chrome and search apps from Android may have some implications for the future of Android’s free business model. In a blog post defending Google’s decision to bundle search and Chrome apps on Android, Google CEO Sundar Pichai outlines the company’s response to the EU’s $5 billion fine. Pichai highlights the fact a typical Android user will “install around 50 apps themselves” and can easily remove preinstalled apps. But if Google is prevented from bundling its own apps, that will upset the Android ecosystem.

“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,” explains Pichai, carefully avoiding the fact that phone makers will no longer be forced to bundle these apps but can still choose to do so. Pichai then hints that the free Android business model has relied on this app bundling. “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,” says Pichai. “But we are concerned that today’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.”

Google has been hit with a record-breaking €4.3 billion ($5 billion) fine by EU regulators for breaking antitrust laws. The European Commission says Google has abused its Android market dominance in three key areas. Google has been bundling its search engine and Chrome apps into the operating system. Google has also blocked phone makers from creating devices that run forked versions of Android, and it “made payments to certain large manufacturers and mobile network operators” to exclusively bundle the Google search app on handsets.

The European Commission now wants Google to bring its “illegal conduct to an end in an effective manner within 90 days of the decision.” That means Google will need to stop forcing manufacturers to preinstall Chrome and Google search in order to offer the Google Play Store on handsets. Google will also need to stop preventing phone makers from using forked versions of Android, as the commission says Google “did not provide any credible evidence that Android forks would be affected by technical failures or fail to support apps.” Google’s illegal payments for app bundling ceased in 2014 after the EU started to look into the issue.

Google is bracing itself for what will likely be a record-breaking EU fine in the coming weeks. The Financial Times reports that the EU antitrust investigation into Android is concluding, and a fine is expected to be announced in July. The European Commission has been investigating Android after rivals complained that Google has been abusing its market dominance in software than runs on smartphones.

Google has been accused of limiting access to the Google Play Store unless phone makers also bundle Google search and Chrome apps, a practice that may have breached EU antitrust rules. Google has also reportedly blocked phone makers from creating devices that run forked versions of Android, as part of an anti-fragmentation agreement.

Google was hit with a record-breaking $2.7 billion fine last month by the European Commission for breaking antitrust laws. The EU says Google demoted rivals and unfairly promoted its own services in search results related to shopping. While the fine is the largest antitrust judgement ever, an even bigger fine could be on the way for Google.

Reuters reports that EU regulators are considering another record-breaking fine for Google over its Android operating system. The European Commission has been investigating Android after rivals complained that Google has been abusing its market dominance. Google has been accused of limiting access to the Google Play Store unless phone makers also bundle Google search and Chrome apps. Google has also reportedly blocked phone makers from creating devices that run forked versions of Android, as part of an anti-fragmentation agreement.

On April 20th, 2016, the European Commission announced that its year-long investigation of Android had led it to believe that Google might be violating European Union antitrust laws. The Commission issued a statement of objections to Google and Alphabet (Google’s parent company), launching a formal antitrust case against them, along with a brief public statement that represents the best window into what is going on.

The EU believes that Google holds a dominant position in three related markets, and that it is using that position to distort competition. The EU claims that Google limits access to key aspects of the Android ecosystem by insisting that phone makers install Google search and Chrome apps. The EU also said that Google blocks phone makers from producing phones that run alternative versions of Android (a so-called anti-fragmentation agreement barring firms from using Android forks). Finally, the EU also believes that Google has illegally paid device makers and mobile phone companies to preinstall Google search exclusively.

"Our preliminary view is that Google has abused its dominant position," said the European commissioner for competition, Margrethe Vestager, in a press conference. Vestager said that Google's licensing practices mean that "tablet and smartphone manufacturers [are] not free to choose which search engines and which browsers to install on their devices. This hampers competing browser and search providers."