Google Looks To Appease EU Regulators With Changes To Android Licensing Practices

A week after Google appealed the $5.05 billion fine imposed by European regulators, the continent's leading mobile OS developer said Tuesday it will change several Android business practices that provoked the record penalty.

The licensing changes around the Android mobile operating system will go into effect by the end of the month, even as Google parent Alphabet’s appeal proceeds through the General Court of the EU, which sits in Luxembourg.

In a blog post, Hiroshi Lockheimer, Google's senior vice president for Platforms & Ecosystems, said Google believes its practices around Android have "created more choice, not less."

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But the Mountain View, Calif.-based Internet giant, which powers roughly 80 percent of all mobile devices in Europe, has also been working on a compliance strategy, and has informed European regulators of changes it expects to allay their concerns.

For starters, Google updated the compatibility agreements it strikes with mobile device makers.

"Going forward, Android partners wishing to distribute Google apps may also build non-compatible, or forked, smartphones and tablets for the European Economic Area (EEA)," Lockheimer said.

The European Commission cited in its decision to fine the company Google's policy of not allowing manufacturers to sell Android if they sell unofficial forks of the mobile operating system.

Google will also start allowing those hardware vendors to license Google's portfolio of mobile applications independent from its Search app and Chrome browser, he said.

The Commission found Google's requirements that smartphone manufacturers pre-install Google Search and its Chrome browser on new devices in exchange for the right to offer access to the Google Play Store constituted illicit pressure, as did its practice of paying some of those manufacturers to pre-install Google apps.

To further satisfy EU demands, Google will offer separate licenses for Search and Chrome, according to Lockheimer.

Partners will have the option of entering commercial agreements "for the non-exclusive pre-installation and placement of Google Search and Chrome," he said. "As before, competing apps may be pre-installed alongside ours."

The European Union's antitrust regulator, the European Commission, said in July the record fine was in response to Google "breaching EU antitrust rules" by imposing "illegal restrictions" on Android device makers and mobile network operators to bolster Google's search engine.

The abusive practices, according to the Commission, were designed to protect mobile advertising revenue—a strategy made possible by the Internet giant's dominance in the mobile phone operating system market.

The practices penalized as anti-competitive have gone on since 2011.

"We’ll be working closely with our Android partners in the coming weeks and months to transition to the new agreements," Lockheimer said.

Just months after Europe fined Google, U.S. regulators told Congress they could consider opening a similar investigation.

Makan Delrahim, the U.S. assistant attorney general for the Justice Department's Antitrust Division, at a Senate hearing earlier this month didn't rule out the possibility of an inquiry into Google's Android business, two sources at the hearing told The New York Post, one of whom said the comments "were fairly significant."