Google has agreed to pay a fine of 55 million Australian dollars (US$36 million) after admitting to anticompetitive agreements with the country’s two largest telecommunications firms, Telstra and Optus.
The Australian Competition and Consumer Commission announced the penalty on Monday in a statement obtained from its website , saying the arrangements between the tech giant and the two telcos reduced search competition and consumer choice in Australia.
According to the ACCC, Google’s Singapore-based Asia Pacific division entered into contracts with Telstra and Optus between late 2019 and early 2021.
Under the agreements, the telcos were banned from installing rival search engines on Android smartphones sold to customers.
The deals, which ran for about 15 months until March 2021, ensured that Google Search was the sole pre-installed option on Android devices. In return, Telstra and Optus received a share of advertising revenue generated from users’ searches.
The regulator said Google had accepted that the agreements were likely to “substantially lessen competition.”
Proceedings have been launched in the Federal Court, which will decide whether the AU$55 million penalty is appropriate.
In addition to the fine, Google has signed a court-enforceable undertaking requiring it to remove restrictions on pre-installation and default search engine options from future contracts with Android phone manufacturers and telecommunications operators.
ACCC chair Gina Cass-Gottlieb welcomed the outcome, stressing that anti-competitive conduct directly harms consumers.
“Conduct that restricts competition is illegal in Australia because it usually means less choice, higher costs or worse service for consumers.
“Today’s outcome, along with Telstra, Optus and TPG’s undertakings, have created the potential for millions of Australians to have greater search choice in the future, and for competing search providers to gain meaningful exposure to Australian consumers,” she said.
Cass-Gottlieb also noted that the changes come at a critical time. “Importantly, these changes come at a time when AI search tools are revolutionising how we search for information, creating new competition,” she said.
Under the new arrangements, Telstra, Optus and TPG are allowed to configure search services on a device-by-device basis, even in ways that may not align with Google’s default settings.
The telcos may also enter into pre-installation agreements with other search providers.
“With AI search tools becoming increasingly available, consumers can experiment with search services on their mobiles,” Cass-Gottlieb said.
The case follows a lengthy ACCC investigation, which began after concerns were raised during the regulator’s Digital Platform Services Inquiry into search defaults and choice screens.
“Co-operation with the ACCC is encouraged.
“It can avoid the need for protracted and costly litigation and lead to more competition.
“More competition in markets drives economic dynamism, but the reverse is true when markets are not sufficiently competitive,” Cass-Gottlieb said.
She said ACCC remains committed to addressing anti-competitive conduct like this, as well as cartel conduct.
Last year, Telstra, Optus, and rival TPG agreed to court-enforceable undertakings with the ACCC, pledging not to renew or enter into similar arrangements with Google that would limit search engine options.
