Google has agreed to pay a $36 million fine for anticompetitive agreements with Australia’s largest telecommunications companies. The deals prevented the installation of competing search engines on certain smartphones, the tech giant and Australia’s competition watchdog confirmed.
The Australian Competition and Consumer Commission (ACCC) said it began proceedings in the Federal Court against Google’s Asia Pacific division. The court will now decide whether the $36 million penalty is appropriate.
Under the agreements, which ran for 15 months until March 2021, Telstra and Optus pre-installed only Google Search on Android devices sold to customers. Other search engines were excluded. In exchange, the telcos received a share of Google’s advertising revenue generated from those devices.
The ACCC said Google accepted that the arrangements could “substantially lessen competition.” The regulator added that the company has committed to court-enforceable changes. These include removing certain restrictions on default search engines and pre-installation agreements with phone manufacturers and telcos.
A Google spokesperson said the company was “pleased to resolve the ACCC’s concerns, which involved provisions that haven’t been in our commercial agreements for some time.”
ACCC Chair Gina Cass-Gottlieb emphasized that restricting competition is illegal in Australia. She said such conduct usually results in fewer choices, higher prices, or lower-quality services for consumers.
Cass-Gottlieb also noted that these developments come at a time when AI-powered search tools are creating new competition. “Importantly, these changes coincide with rapid growth in AI search tools, which are reshaping how people find information,” she added.
Last year, Telstra, Optus, and smaller competitor TPG signed court-enforceable undertakings with the ACCC. They agreed not to renew or make similar deals with Google that limit search engine options for users.
The agreements highlight the challenges regulators face in keeping digital markets competitive. By limiting which search engines could be pre-installed, the deals effectively gave Google an advantage over other search providers. Critics said this reduced consumer choice and stifled innovation.
The ACCC’s action signals that anticompetitive practices by tech giants will face close scrutiny. The commission is actively monitoring agreements between digital platforms and service providers to ensure fair competition.
Industry experts say the case could influence how tech companies structure partnerships with telecom operators in the future. Google’s willingness to settle may also reflect the growing global focus on competition law in digital markets.
Google has previously faced similar scrutiny in other regions. In the European Union, for example, the company has been fined billions of dollars for practices deemed anticompetitive. These include favoring its own services over competitors and restricting software installations on devices.
Australia’s approach mirrors international trends, where regulators are increasingly concerned about how major technology companies influence market choices. The ACCC’s focus on pre-installed search engines shows that even seemingly small contractual terms can have wide-ranging effects on competition.
For consumers, these changes could mean more freedom to choose search engines on Android devices. By limiting exclusive agreements, regulators hope to encourage innovation and better services in the online search market.
The Federal Court’s final ruling will determine if the $36 million fine is upheld. Meanwhile, Google and the telcos have agreed to implement the changes outlined by the ACCC, signaling a shift toward more open competition in Australia’s digital ecosystem.
