Google has quietly acknowledged that $350 is a bit too much to charge consumers who ditch its Nexus One smartphone.
The company’s terms of sale for the device now state customers who cancel their Nexus One accounts within 120 days of purchase will have to pay a $150 equipment recovery fee. Previously, Google had been charging a $350 equipment recovery fee for customers who backed out of their Nexus One deals after 120 days.
Google’s decision to charge an early termination fee for the Nexus One has been controversial because both Google and T-Mobile currently charge users separate early termination fees if they drop their Nexus One in less than four months. With a Google fee of $350 and a T-Mobile early termination fee of $200, consumers originally would have had to pay up to $550 for breaking their contracts early.
The practice of charging early termination fees has come under fire in recent months after Verizon doubled its standard early termination fee from $175 to $350 last November. The FCC last month sent letters to AT&T, Google, Sprint, T-Mobile and Verizon "to gather facts and data on the consumer experience with early termination fees." In particular the FCC cited concerns that early termination fees "have an important impact on consumers’ ability to switch carriers" and said the commission must make sure that "consumers fully understand what they are signing up for… when they accept a service plan with an early termination fee."
Google makes drastic cut to Nexus One smartphone termination fee charge