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Android is an open source platform. Neither developers nor handset manufacturers pay royalties or license fees to develop for the platform.

The underlying operating system of Android is licensed under GNU General Public License Version 2 (GPLv2), a strong "copyleft" license where any third-party improvements must continue to fall under the open source licensing agreement terms.The Android framework is distributed under the Apache Software License (ASL/Apache2), which allows for the distribution of both open- and closed-source derivations of the source code. Commercial developers (handset manufacturers especially) can choose to enhance the platform without having to provide their improvements to the open source community. Instead, developers can profit from enhancements such as handset-specific improvements and redistribute their work under whatever licensing they want.

Android application developers have the ability to distribute their applications under whatever licensing scheme they prefer. Developers can write open source freeware or traditional licensed applications for profit and everything in between.

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