Sorry, what?
Downloading applications from the internet to use on your phone is illegal?
If the applications are free of charge, then I cannot see why the applications that is downloaded from the internet would be illegal to use on the Android phone itself.
Even if the person paid for the application online, downloaded and then installed on their phone, that process (to my knowledge) is legal.
If it is pirated software from torrent sites and the like, then that would be illegal.