DUBLIN, April 19, 2016 /PRNewswire/ --
Europe's antitrust regulators are looking to introduce new smartphone charges with the goal of making it more difficult to generate revenue from mobile ads. The new charges could be especially troublesome for Alphabet Inc. subsidiary Google, as it will require the tech giant to change how it implements smartphone tools like its Search feature. The charges look to redress issues caused by pre-installed Google applications on Android operating systems. Google may generate less revenue from mobile ads in addition to paying other companies to distribute its services in Europe as a result. The global mobile ad spending market is forecast to grow at a CAGR of 38.12% by 2019, according to a report available from Research and Markets, but the new charges could have an unexpected effect on this figure.
Regulators are concerned that Google's pre-installed applications are stifling competition and stopping new apps from reaching customers. Google gives Android away as part of its mobile strategy, providing phone makers like LG and Samsung with the software in exchange for pre-installed Google apps on the device. Phone makers benefit from the strategy as it allows them to concentrate on hardware and avoid operating system development costs. Alphabet made around USD 25 billion from Europe alone last year.
If approved, the new smartphone charges could have a knock-on effect on related markets. The global mobile analytics market is forecast to grow at a CAGR of 20.82% by 2020, as noted in a recent report, but this figure could be higher as Google may require new means to utilize consumer data.
Similarly, the global in-app advertising market is predicted to grow at a CAGR of 39.97% by 2019, as forecast in an industry report, but this figure could be higher if newer applications are given the opportunity to succeed as it will likely lead to renewed ad interest in this area.
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