Google to pay $36M fine for anticompetitive deals with Australia's largest telcos

Key Points

• Google has been fined AU$55 million ($36 million) for engaging in anticompetitive practices with Australia’s top two telcos, Telstra and Optus, by preventing competition in search engine options on Android smartphones.
• The Australian Competition and Consumer Commission stated that the agreements likely resulted in “substantially lessening competition” and has initiated court proceedings regarding the appropriateness of the fine.
• As part of the resolution, Google has agreed to remove restrictions on search engine pre-installation in its contracts with Android manufacturers and telecommunications companies.
• This case comes amid a backdrop of increasing competition in search technologies, particularly with the rise of AI search tools.

MELBOURNE, Austalia (AP) — Google has agreed to pay a 55 million Australian dollar ($36 million) fine for signing anticompetitive deals with Australia’s two largest telcos that banned the installation of competing search engines on some smartphones, the U.S. tech giant and Australia’s competition watchdog said.

The Australian Competition and Consumer Commission said in a statement it had commenced proceedings in the Australian Federal Court on Monday against the Singapore-based Google Asia Pacific division. The court will decide whether the AU$50 million ($36 million) penalty is appropriate.

Under the anticompetitive agreements, which were in place for 15 months until March 2021, Telstra and Optus only pre-installed Google Search on Android phones sold to customers. Other search engines were excluded. In return, the telcos received a share of the advertisement revenue Google generated from those customers.

Google accepted that the agreements were likely to have the effect of “substantially lessening competition,” the commission said.

Google has also signed a court-enforceable undertaking that commits the company to removing certain pre-installation and default search engine restrictions from its contracts with Android phone manufacturers and telcos, the commission said.

The tech company said in a statement: “We’re pleased to resolve the ACCC’s concerns, which involved provisions that haven’t been in our commercial agreements for some time.”

Commissioner chair Gina-Cass Gottlieb said: "Conduct that restricts competition is illegal in Australia because it usually means less choice, higher costs or worse service for consumers.”

“Importantly, these changes come at a time when AI search tools are revolutionising how we search for information, creating new competition,” Cass-Gottlieb added.

Last year, Telstra, Optus and their smaller rival TPG agreed to court-enforceable undertakings with the commission that they would not renew or make similar deals with Google to limit search options.