The Australian Competition and Consumer Commission (ACCC) has initiated Federal Court proceedings against Google over anti-competitive practices linked to search engine pre-installation agreements with telecom operators Telstra and Optus.
Google, the #1 online search engine in the world, has admitted liability and agreed to pay a $55 million penalty, subject to court approval.
Between December 2019 and March 2021, Google entered into revenue-sharing agreements with Telstra and Optus that required Android mobile phones sold by the telcos to exclusively pre-install Google Search, blocking the inclusion of rival search engines.
In exchange, Telstra and Optus received a portion of advertising revenue generated through searches on these devices. The ACCC found that these arrangements likely hindered competition by making it more difficult for other search providers to gain market presence in Australia.
Google has also signed a court-enforceable undertaking with the ACCC addressing broader concerns about its contractual arrangements with Android phone manufacturers and Australian telcos dating back to 2017. Under the undertaking, Google has committed to removing certain pre-installation and default search engine restrictions from future agreements.
This move follows similar undertakings by Telstra, Optus, and TPG in 2024, which barred them from entering exclusive agreements requiring Google Search to be the default option on Android devices. These changes are expected to open opportunities for alternative search engines and increase consumer choice, particularly as AI-powered search tools emerge as strong competitors in the market.
ACCC Chair Gina Cass-Gottlieb emphasized that conduct restricting competition is unlawful in Australia, often resulting in reduced consumer choice, higher costs, and poorer service. She noted that these outcomes are significant at a time when AI search technologies are transforming the industry landscape.
The ACCC’s enforcement action stems from findings in its five-year Digital Platform Services Inquiry, which highlighted the risks of exclusive pre-installation and default arrangements in digital markets. The Commission has recommended a new regulatory framework to strengthen competition in digital platform services, including service-specific codes for major tech platforms.
By cooperating with the ACCC, Google avoided protracted litigation but conceded that its practices limited competition in Australia’s search engine market. The outcome reinforces the ACCC’s priority focus on digital economy competition issues, signaling stronger regulatory oversight of big tech business practices in the country.
TelecomLead.com News Desk
