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Google To Charge Smartphone Makers For Google Play in Europe (reuters.com)
Google will charge smartphone makers a licensing fee for using its popular Google Play app store and also allow them to use rival versions of its Android mobile operating system to comply with an EU antitrust order, it said Tuesday. From a report: Google, an Alphabet subsidiary, announced the changes on Tuesday, three months after the European Commission handed it a landmark 4.34 billion euro ($5 billion) fine for using its popular Android mobile operating system to hinder rivals. The company said the licensing fees will offset revenue lost as a result of its compliance efforts. "Since the pre-installation of Google Search and Chrome together with our other apps helped us fund the development and free distribution of Android, we will introduce a new paid licensing agreement for smartphones and tablets shipped into the EEA," Hiroshi Lockheimer, senior vice president for platforms and ecosystems, said in a blog. In a blog post, Lockheimer wrote: Second, device manufacturers will be able to license the Google mobile application suite separately from the Google Search App or the Chrome browser. Since the pre-installation of Google Search and Chrome together with our other apps helped us fund the development and free distribution of Android, we will introduce a new paid licensing agreement for smartphones and tablets shipped into the EEA. Android will remain free and open source.
Third, we will offer separate licenses to the Google Search app and to Chrome.
We'll also offer new commercial agreements to partners for the non-exclusive pre-installation and placement of Google Search and Chrome. As before, competing apps may be pre-installed alongside ours. These new licensing options will come into effect on October 29, 2018, for all new smartphones and tablets launched in the EEA.
We'll also offer new commercial agreements to partners for the non-exclusive pre-installation and placement of Google Search and Chrome. As before, competing apps may be pre-installed alongside ours. These new licensing options will come into effect on October 29, 2018, for all new smartphones and tablets launched in the EEA.
When companies pass gov fees downstream ... they are greedy robber barons.
...
And that is just so obvious, we will hide that, I mean, we don't have to say anything about that here.
Move along
For big companies such large fines rarely if ever get paid, if they do there are tricks to get the people who fined them to pay them for it.
Sure for a normal guy like me a fine of $100,000 would be enough to set me back and lower my standard of living for a long time. But I wouldn't have much recourse, After the verdict is finalized. I either pay a fine or go to jail.
However for a company like Google, 5 billion dollars would hurt them a little bit, however they have resources to work around it. Turing a free service to a paid service. Knowing that they are a monopoly because there isn't much competition will just mean they will get paid for a service they use to offer for free.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
You'll pay $10-$20 bucks more for an Android but get privacy and consumer options.
It might be less. You can be Microsoft will be happy to pay a handset manufacturer to make Bing the default. That said, I can run alternatives to google services on my phone and, well, I don't. Not because I can't but because their software tends to be the best, at least for low end phones like my old LG Note.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
Literally, topic. I don't like chrome on android because it has no add-ons that I feel are necessary for browsing. It would also be nice to be able to remove gmail for an actually decent POP3/IMAP email client. Pretty much the only things I use from google are maps and play store, and I'd love for play store de facto monopoly to go away. And as for maps, here maps are on par or better than google's around here.
It wouldn't hurt if they also removed all the tracking, but I don't dare even dream about that. Tracking people is google's core business, and that thing will be taken out of their cold, dead hands only.
EEA stands for European Economic Area, in case anyone [else] is curious.
https://en.wikipedia.org/wiki/...
3. Profit!
2. ???
1. On Soviet Slashdot, a Beowulf cluster of alien Natalie Portman overlords welcomes YOU!
I thought the AOSP provided a generic POP3/IMAP mail client and (now) no browser? At least it was this way the last time I was playing with it, around Android 4.3 or 5.
Fully licensed blockchain psychiatrist
Comment removed based on user account deletion
Actually I think you described the difference without realizing it right there. Apple is a computer maker that makes proprietary s/w as "part of it" - and google is a s/w company foraging into h/w (poorly..) trying to arm-twist 3rd party vendors.
corruption?
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
If I understand EU refs right, Apple markets a complete device. When you buy it, thatâ(TM)s what you get. Google markets an OS to other companies and was applying rules that reached beyond first sale to those companies and bound what those companies could offer their customers. Itâ(TM)s fine to sell a closed device. Itâ(TM)s not fine to sell part of a device that comes with strings that affect the rest of the device.
Seems to me that Google is basically saying, "You don't like free?!? FINE! -- then we'll just charge you for everything!" and then sticking their middle finger up at the EU courts.
I mean, I'm not saying that Google is right necessarily... but that's certainly how their response reads, to my mind.
1) Apple doesn't command a significant share of the market. Particularly in Europe.
2) Apple makes a single product with many parts. The OS happens to be one part.
I'm sure point 2 would be more or less moot if point 1 weren't true, but the fact is that it is. Apple commands most of the profits in the industry, but there's still a lot of competition, and Apple isn't able to leverage any monopoly power to quash competitors. IANAL, but I would suspect that without being able to show that Apple is a monopoly power stifling competition in the phone market, there's no anti-trust case to be made.
And yet, they (and Australia) will bitch about higher prices for the same thing elsewhere (presumably PPP adjusted, but may not), to cover the higher costs of selling items, which the govt mandated warranties, return policies, employee benefits, etc.
I have 8.1. barebones android phone (nokia) and it has no email client other than gmail that I could find when I got it. The only installed browser was chrome.
... To me, Apple is more guilty of antitrust than Google.
What am I missing?
IANAL, but if I were to hazard a guess: Perhaps, in order to pressure Apple over this issue, the EU would need a competitor to come forward with a lawsuit. There are no legitimate* competitors to Apple's App Store; therefore, there can be no lawsuit.
* The "alternative" sources which could ostensibly compete with Apple's App Store generally find themselves far too reliant upon "ethically challenging" behaviors in order to even exist... such as relying upon jailbreaking in order to get their wares onto an iPhone. People who engage in ethically challenging behaviors very obviously tend to avoid the court system as much as they can. So in a disturbing bit of irony, Google may have actually opened the door to this lawsuit themselves, by enabling and authorizing legitimate competition with their own app store.
This is both awful and stupid. The point of fines is not to have someone else pay them for you. It's punishment for an unfair advantage you created for yourself. This fine should come out of those profits.
But charging a fee for access to the Google Play Store is probably going to mean that we're going to have to get our apps at a Samsung store from now on, and that would definitely be terrible for everybody involved.
A better option would be an open store that sold the best and most popular Android apps, but with a better percentage of the revenue going to the app makers. That would give users less crap to wade through, it would give app makers a bigger share of the profit, and the app store itself could mostly leech off the work that Google has already done. A win for everybody except Google.
I think it would honestly be better for Google to just take the loss instead of ruining their business out of a misguided attempt to dodge this fine.
Of course smartphone makers will find ways to charge the buyers of such smartphones. So in the end the EU only hurt the very people it claimed to be protecting. How ironic and stupid is that?
That thing I immediately remove from any new phone so that I can use f-droid without being spied on by advertisers?
The fact that Apple only has 15% of the market while Google basically owns the rest of it? Because the specific charge the EU is levelling against Google is abuse of dominant market position and this is how they define it:
http://ec.europa.eu/competitio...
"Why should I want to make anything up? Life's bad enough as it is without wanting to invent any more of it."
In unrelated news. Samsung today announced they will start selling a version of the Galaxy and Note 9 phones running their Tizen OS in the EU.
"A person is smart. People are dumb, panicky dangerous animals and you know it." - K
If I understand EU refs right, Apple markets a complete device.
So... the way for Google to appease the EU's regulators is to become more of a locked down, Apple-style ecosystem that restricts consumer choice to a single, company-run app store and precludes alternate browsers and software that competes with anything that company also sells?
Got it.
Say goodbye to the Amazon app store, F-Droid, and the rest. The EU has picked the winner: it's Apple's business model.
Well pfff! In this case my next phone is going to be an Apple, so I can use whatever app store I want.
Nothing.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
Unlike Google, Apple doesn't control the overwhelming majority of the phone market.
govt mandated warranties
Hilariously those lead to WORSE warranties in the EU compared to the US. I regularly run into products where manufacturers offer 3-10 years warranty in the US but only the mandatory 2 in the EU.
There is at least one 'legitimate' competitor to Apple's App Store: Valve's Steam iOS application(s), where Apple decided to ban Steam Link and any opportunity to buy stuff in Steam's app just a few months ago.
The application(s) and the ability to buy exist even if Apple does not allow distribution. Steam is obviously well known and legitimate. The fact that Steam's selection is limited to games is immaterial. Apple still benefits by removing competition and forcing games to its App Store where it gets 30% of revenue. IMHO, the same argument you used against Google applies to Apple in this case.
Yes, the EU should have mandated 10 years warranty for appliances and 5 years for consumer electronics including mandatory security updates.
I am sure the EU will want more money quite soon, so keep your fingers crossed.
Sent from my ASR33 using ASCII
3) Apple gets away with it for now.
It doesn't take a genius to see that EU will force Apple to open its app market sooner or later.
When all you have is a hammer, every problem starts to look like a thumb.
Your theory only covers app store competitors. Any application vendor has standing to sue. For example, the Android Fortnite client drama could play out again on Apple. But what makes you think that the EU can't act unless a competitor comes forward?
When all you have is a hammer, every problem starts to look like a thumb.
1) Bullshit. Apple gets a lot more revenue out of European app store sales than does google. Stop lying.
2) How does that make Apple's monopoly position less of a monopoly?
The fact that Apple only has 15% of the market while Google basically owns the rest of it?
American antitrust law concerns itself with "market power", which is not defined in terms of the fraction a market a vendor controls, but rather, whether the vendor is able to exert control over prices and other factors in its market. Which Apple certainly does. However, we are not talking America here, we are talking EU, which has much more freedom to act in whatever way they deem beneficial to their citizens.
When all you have is a hammer, every problem starts to look like a thumb.
Yep, the infamous successful American company tax the EU keeps applying. The EU will never dare to do this against a European or Chinese company.
My barebones Alcatel comes with the Android Mail application (as well as GMail et al) installed. I don't think I've had an Android phone since my first that didn't come with it - sounds like a "Nokia" problem, not an Android problem.
You are not alone. This is not normal. None of this is normal.
Bad analogy guy, is that you? Computer manufacturers absolutely sell bare-bones systems for people who want to kit them out. Google prohibits this for Android vendors. They simply are not allowed to sell phones without Google apps.
Or makers who sell smartphone in Europe?
Sent as ripples into the electromagnetic field. No single photon has been harmed in the process.
If you do not want to use the Apple AppStore, you can CHOOSE to buy another phone - no problem.
Apple also has a business model also does not conflict with 3rd party web browsers. It also does not restrict choice to one AppStore.
The Apple business model also does not prevent competing 3rd party apps. For example, Pandora is available on the iPhone, despite the existence of AppleMusic.
So try again.
Well, I smell a revenge after EU fined Google with EUR 5 billion, isn't it?
Last I checked most (all?) of the current Nokia smartphones on the market are Android One devices, and while I don't have a Nokia phone myself I do have a recent Xiaomi phone that's also part of the Android One program and it also only had Gmail installed by default. Given how closely tied Android One devices are to Google's services I don't think it's too surprising to find they didn't bother including the basic client by default on such hardware.
Hilariously those lead to WORSE warranties in the EU compared to the US. I regularly run into products where manufacturers offer 3-10 years warranty in the US but only the mandatory 2 in the EU.
This is a common "unintended consequence" of government mandates. It is illegal for companies to explicitly collude on prices, wages, and warranties. But if the government sets a mandate, then they can all use that as an implicit collusion level.
While Google is spinning it as something bad for consumers, this has the potential to be quite a good thing. Amazon app store should now be possible to have on an android phone without sideloading.
Fear is the mind-killer.
Err.. Apple does restrict 3rd party browsers. Every iOS browser has to use Apple's Safari for rendering, despite having their own backend. So iOS Chrome, Edge, etc. are just fronts of Safari.
That's a far more severe restriction than Google has ever had, despite Chrome being very useful to Google's business model.
I can live with Google knowing what apps I install via Google Play, but the rest of the spyware they put into the phone -- collecting my address book, my calls, text messages, location via nearby WiFi hot-spots etc. is too much.
I hope to see a more secure and private Android thanks to this, and paying a few tens of euros more for that privacy is fine.
I installed Lineage 14.1 on a phone, based on Android 7.1.2, it comes with a browser called "Browser" (translated in the local language).
I thought that's part of every Android installation? Even if an even more raw AOSP doesn't include it, I thought there has to be the embeddable "Web view", kind of like Windows came with mshtml.dll.
BTW I found "Privacy Browser" in the F-Droid store, and put that in the bottom bar. Seems to be same thing but with ad and tracking blockers included. Would have put Firefox in there but as it's a relatively low spec phone I'm not too sure about using Firefox on it. I don't even browse the web on the phone anyhow.
There's the generic mail client too.
I use the phone as a phone, but it's annoying so I need to get a new dumb phone. Amazingly, a phone OS doesn't come with a GUI or software to copy contacts from/to the SIM card, some phones could do that 15 years ago.
Nokia phone's primary selling feature is that they're selling a pure android. It has zero customizations of any kind.
Well, that's the rub isn't it, because "pure Android" can mean "Exactly what Google would give you" (more probably) or "AOSP" (fairly unlikely.) The Mail app is part of AOSP. Google's "Android" however isn't pure AOSP, or even pure AOSP + the Google suite, it's often confused with the latter, but it's been drifting away from AOSP for many years now.
Here's email, as you can see it's in there right up to AOSP 9.1 as of the current state of the universe.
I believe most phone makers include it. Sounds like Nokia doesn't, possibly because it's advertising the "Pure Android" horseshit.
You are not alone. This is not normal. None of this is normal.
If you do not want to use the Apple AppStore, you can CHOOSE to buy another phone
And if you don't want to use Google's app store, you can just... use another one. Or buy another kind of phone. You have much more control than you get in the Apple ecosystem.
So try again.
Uh, you know for the first 4 years of the idevice ecosystem, that wasn't the case, right? No apps could even run in the background, so the best alternative music player had to be open with the screen on.
Now everyone has to fight an uphill battle to gain marketshare. Also, does Pandora integrate with the OS seamlessly? Can you set it as the default music player -- if you press play on a bluetooth remote (if that is allowed), will it load and start a Pandora stream?
If not, you need to try again.
This move by Google may well backfire on them, because it is in effect an admission of guilt and a declaration of how much they've been profitting from their anti-trust violation.
If the EU slaps that amount backdated over the life of Android as restitution and then triples it as a penalty on top of their existing fine, Google will have no way to argue against it, since they've admitted to their gains from it voluntarily.
Tracking? Like how when you open Google maps it does a GPS check even if GPS had been disabled by the user?
After Google was fined billions of dollars for giving free apps to Europeans, Google has agreed to stop being so evil.
Google will now charge Europeans for the apps.
Other providers of free stuff for Europeans should take note and begin charging.
Samsung Android phones allow you to completely disable Chrome. Samsung Internet provides content blocking, privacy, etc. and the Samsung mail client supports standard mail servers (I use it with my dovecot server).
They advertise their phones come with Android One, which is Google's customised version of Android.
Android One brings a Google designed software experience to a new range of Nokia smartphones. Get everything you want and nothing you don’t with a streamlined, easy to use interface and a curated set of pre-installed apps,
"nothing you don't", as determined by Google.
If a manufacturer does not want to abide by Google's rules, they don't have to use their software - no problem.
Before the last time Nokia went tits-up, they were using Microsoft's OS on their phones. Absolutely no influence from Google. Before that their smartphones used their own software.
Before Palm went under (and has now risen again in name only) they used their own OS too.
Companies like HTC, iMate, etc. all used Windows Phone and Windows Mobile on their old smartphones. No one sued Microsoft for including Internet Explorer in Windows Mobile (like they did with Windows).
Until you actually need those warranties. Then you realize it is only valid if you currently live in the US. You have to pay for shipping and handling out of your own pocket. And if they refuse to pay out, there is not much you can do.
The way to appease regulators is exactly what Google did: stop using control in one product domain to force leverage in another domain. They now charge for something they used to give freely and as a result will have to compete against other market offerings.
Seriously? You have an open source operating system that you can use for free. You also have extra closed source components that you can use for free, you just have to decide one way or the other. No wonder there is nothing resembling Sillicon Valley in Europe.
Democrat Party troll-master David Brock loves molesting children in his basement.
It's time for President Trump to get out his trust-busting stick and break up Alphabet.
Alphabet has grown too big and has too much market power. It has repeatedly shown itself ready to abuse its power to stifle competition, and to censor the free expression that's necessary for a healthy democracy.
Android - separate company
Chrome - separate company
Gmail - separate company
Search - separate company
Surveillance / "advertising" - separate company
The main issue is about bundling of other services and the fact that Android is in a monopoly position. Where you're in a monopoly position, special rules apply.
Google offered the open-source version of Android, and you can take that no problem. But they also offered the Google suite of services as a bundle. And there were two main issues here:
1) If you just wanted, let's say, the Google Play store, you couldn't get it by itself without taking it all (including Gmail, Chrome, etc.).
2) As soon as you sold one phone model that took the bundle, you were forbidden from selling any Android phone that *did not* include the whole bundle. (You can only either do exclusively "no-Google Android", like Amazon, or exclusively "all-Google Android", like Samsung.)
Because Android is so established and given away for free, it limits the likelihood of new competitors entering the phone OS space. And because of this bundle, it limits the potential for other competitors to compete on a level playing field in any of the other spaces either (app market, browser, email client/service, etc.). (The fact that Amazon FireOS exists isn't itself enough because of the "take-it-or-leave-it" ultimatum for manufacturers.) In the EU's view, Google was basically dumping the OS on the market at below cost and leveraging their market dominance to fortify their business in other areas, shutting out the potential for fair competition. It's the same sort of principle that led to the fine against Microsoft for bundling Internet Explorer and Windows Media Player in Windows many years ago. (The fact you can easily just go download and install other competing software wasn't enough in either case, in their view.)
Google's solution here resolves all this: it splits the bundle so you don't have to take it all, and it eliminates the restriction on selling Android phones without Google services (so now, within the EEA, companies like Samsung could sell Android phones both with and without Google services, or with different combinations of services).
If Apple were in a monopoly position, they too would come under EU regulator pressure to open up their system. But basically, it's the privilege of not being dominant (and Apple's closed nature and pricing structure probably ensures they'll never be the monopoly). EU laws are basically to prevent any one company from getting too dominant and from using their dominance in one space to restrict competition in other spaces.
As with what happened to Microsoft in the past, though, it's not unlikely that the solution will be both too late and too ineffective to really solve the problem, and the market may well correct itself regardless. But, in the end, the issue really has nothing to do with being open or closed, just the burden of being too popular.
Google was keeping it for free in exchange of not allowing competition. Now, not only Google is forbidden of stopping competition, but it also decided to give them a push the other way.
With this, hopefully, smartphone makers will start giving the consumers a choice between the Goggle version and the Free version.
Until you actually need those warranties.
That's the thing that bugs me living in the EU: I don't really need them.
In all the time since the mandatory warranty regulations I've had a single case where something broke within two years. Yet I have to pay for those regulations every single time I buy something (through increased prices). It's like buying mandatory insurance for something that was free anyway (if you picked good manufacturers that used to offer warranties on their own). To make matters worse, I have to pay for people who abuse the regulations to get new stuff for free.
Then you realize it is only valid if you currently live in the US.
Before the regulations a lot of companies had warranty fulfilment centers in the EU. Might have even been an encouragement to buy from local companies. Now that the burden is on the sellers and not the manufacturers, the latter have no advantage over the cheapest imported stuff where the manufacturer doesn't give a damn.
EU enforces a guarantee (not warranty) on most sold products which does protect the customer for 2 years. If the company sells a shitty/faulty product, I, as a customer, can rely on this mechanism to get a replacement or repair without any additional expenses from my part. Additionally, the customer has the right to rely on the seller to make a claim, which makes is much easier than dealing with the manufacturer, which of course is also possible. It is fairly easy to also enforce this mechanism if needed.
A warranty is a voluntary contract usually between the manufacturer and the customer and can contain virtually anything: if your product breaks after the second full moon of Hanuka, you may return it via courier and we will refund you twice of what you paid.
Warranty and guarantee are not mutually exclusive. Companies can and do provide warranties in the EU.
Judging by many reviews of quite pricey products sold in non-EU countries, TVs, smartphones, fridges, etc., where people complain that their product broke 12months in and have now to repair or replace the product at their own expense because their case is not covered in the voluntary warranty provided by the manufacturer, I am under the impression that the EU guarantee provides far superior, more reliable and actually enforceable customer protection.
That is the new versions. I have the first gen, which are just pure android. The only customization is the nokia's warranty app which lets you check if your warranty is still on and some technical details about the phone.
Everything else is stock android. It didn't even have a video player or audio player bundled. Just the standard google play package on top of aosp.
Thanks for the info. I'm wiser on the topic now. I'll see if I can find an apk of this thing.
If I understand EU refs right, Apple markets a complete device.
So... the way for Google to appease the EU's regulators is to become more of a locked down, Apple-style ecosystem that restricts consumer choice to a single, company-run app store and precludes alternate browsers and software that competes with anything that company also sells?
Got it.
Say goodbye to the Amazon app store, F-Droid, and the rest. The EU has picked the winner: it's Apple's business model.
No.
The way for Google to appease the EU regulators is to sell phones to the public instead of selling android to phone manufacturers.
Currently they sell android to manufacturers, but with GApps handcuffs.
That is because you don't understand antitrust. Anti-trust is about using your position of power to be anti-competitive against others. One example of anti-trust is taking a highly popular product that is used on a wide variety of hardware, and adding restrictions to that product that artificially limit the business a company chooses to make with another. For example permitting the use of Google Play only when a vendor doesn't ship a competitors product (Bing search engine).
Apple on the other hand is not being anti-competitive. There is zero requirement anywhere in the world for a vendor to dice up and serve their stack in pieces to be consumed how another company sees fit. Apple having complete control of *their* product isn't an antitrust issue. Likewise Google restricting the use of the Google Play store to *only* Google devices would also not be an antitrust issue. Neither imposes anticompetive practices on a 3rd party.
Also of note would be the fact that in order to have an antitrust claim against you you actually have to be in a position of power. 19% market share is not a position of power, so the Apple case fails on both requirements.
corruption?
Understanding. In this case understanding of what "antitrust" actually is.
So... the way for Google to appease the EU's regulators is to become more of a locked down,
No. The way Google appeases the EU regulators is to monetise their product properly (i.e. charge a fee) rather than add anti-competitive strings (lock out participation of other vendors from the default configuration).
Err.. Apple does restrict 3rd party browsers.
Yours and the GP's point are irrelevant. It's their device and enjoys a minority position in the market.
On the other hand a Samsung Galaxy S is NOT Google's device in which case they are not able to restrict any deals Samsung make with Microsoft or whoever else without falling afoul of antitrust laws.
If a manufacturer does not want to abide by Google's rules, they don't have to use their software - no problem.
Yes problem. Google's rules extend beyond the line of their sale. Google has a market share of considerable power which means that manufacturers are forced towards adopting Google's rules or provide a device that doesn't meet a customer's requirements.
This is the fundamental piece of anti-trust legislation: Having power over company's decisions, and using that power anti-competitively. A vendor can't opt out of the former.
No one sued Microsoft for including Internet Explorer in Windows Mobile
It didn't come with strings attached that had nothing to do with Internet Explorer.
It didn't stop Amazon using Android as a based for it's Kindle Fire.
Then obviously Nokia made customisations.
Is that the Kindle Fire sold first and foremost under the brand for reading Amazon content, marketed for use with Amazon content, actually locked down to Amazon content, doesn't have access to the Play Store or Google services, and effectively makes it about equal to Windows RT in terms of what consumers expect and what is delivered?
You spoke to my point perfectly. You just described the "success" of a product that would absolutely fail being marketed as an Android Phone, ... Or an Android device in general.
You may notice that on Amazon's website they don't even mention the term "Android" anywhere.
You demonstrated you're an idiot.
Oooh burn. Honestly I expected another round of silly arguments from you. I'm kind of upset you folded so easily. I mean predictable since you don't appear to have a clue what the words anti-competitive actually mean in an article about anti-competitive practices, but really man... I'm disappointed.
$40 Google royalty per phone seems a bit high, I can't see EU consumers being happy about it. After all, Google really should be paying manufacturers to install its software because that is how Google tracks people and makes enormous amounts of money from advertising. So it seems likely to me that Google will find itself the target of further antitrust action if they hold to their current course. This leak might be effectively just a negotiating tactic, or it just might be pure stupidity. Hard to tell at this point.
If Google does somehow manage to make their $40/phone tax stick then that would be a huge boost to AOSP, OpenStreetmap and the like. The more likely result is, horsetrading gets it down to the $5/phone range and life goes on. Google really does want its spying/adserving software on as many phones as possible, and they need those phones to be as cheap as possible, which rather weakens their negotiating position.
When all you have is a hammer, every problem starts to look like a thumb.