Telstra and Optus, telecom operators in Australia, will not sign Google for pre-installing its search services and setting as the default search function on Android devices they supply, the ACCC said.
The undertakings from Telstra and Optus are as part of the ACCC’s investigation into dominance of Google’s search services in Australia. This will be a major setback for Google, which commands 98 percent share in online search market in Australia. Google does not reveal its revenue in Australia. Globally, Google generated total revenue of $307 billion in 2023.
Industry feels that Google Android-powered smartphones dominate the online search market. The efforts of the ACCC will not reduce the dominance of Google in the search business as Samsung, Oppo, Nokia, Lenovo, among others, will continue to bring their Android smartphones without contract with Telstra and Optus. Apple is the # phone brand in Australia, according to the latest IDC report.
IDC revealed that Apple (52.6 percent share), Samsung (27.9 percent), Oppo (4.7 percent), HMD (3.2 percent), Google (3.1 percent), Lenovo (3.1 percent) are the leading smartphone suppliers in Australia.
Kiranjeet Kaur, Associate Research Director for Devices Research at IDC Asia Pacific, noted that the smartphone market in Australia is not big as phone vendors supplied 2.1 million units in Q4 2023.
ACCC Commissioner Liza Carver said the undertakings from Telstra and Optus will allow alternative search engines to be able to compete to be a default search engine on Android devices.
Google’s agreements with Telstra and Optus, in place since at least 2017, limited the ability for rival search engines to be pre-installed and promoted on Android devices, in return for a share of Google’s advertising revenue. Telstra and Optus will not renew their existing agreements that expired on 30 June 2024.
“We are continuing our investigation into Google’s conduct in entering into such agreements more broadly, as we consider this raises potential competition concerns. Accordingly, no further comment about the investigation will be made at this time,” Liza Carver said.
“Practices such as entering into agreements to ensure exclusivity can limit consumer choice or deter innovation. Digital platforms with significant market power should be aware of their obligations under Australia’s competition laws.”
Copies of the undertakings are available at: Telstra and Telstra Group and Optus Mobile and Singtel Optus
In Australia, smartphones represent the largest distribution channel for search services, with 95 percent of Australian adults use a mobile phone to access the internet.
Google’s search engine being pre-installed as a default search service on devices was contributing to it being the dominant search engine in Australia. ACCC found there are strong consumer biases towards default settings. The ACCC will submit its DPSI 9th interim report in September 2024 and its final report in March 2025.
On mobile devices, Google Search’s market share in Australia has remained consistently around 98 percent from September 2021 to February 2024, with other search engines, including Microsoft’s Bing, only having a small presence.
Baburajan Kizhakedath
