Google accepted a fine of 55 million Australian dollars (about 35,8 million US dollars and about 30,6 million euros) for its role in commercial agreements in Australia that restricted competition in search within Android phones sold by two major operators.
According to the Australian Competition and Consumer Commission (ACCC), the agreements with Telstra and Optus stipulated that Google Search was the only pre-installed option , in exchange for a share of advertising revenue . The case has been settled, but the fine requires ratification by the Federal Court before it becomes final.
What happened
The ACCC initiated proceedings before the Federal Court against Google's Asia-Pacific division for practices that, in its view, substantially reduced competition in the mobile search engine market between December 2019 and March 2021.
During that period, Android phones sold by Telstra and Optus were delivered with Google Search as the only pre-installed and default search engine , which left out alternatives that could have competed for that space.
In return, the operators received a share of the advertising revenue generated when their customers used the Google search application, the competition authority explained.
Google has acknowledged that these agreements were likely to significantly reduce competition , and has cooperated with the authority in jointly submitting a proposed penalty of AUD 55 million, pending the Court's decision.
The agreements with Telstra and Optus
The agreements, in effect approximately between December 2019 and March 2021 , stipulated that only Google Search would be pre-installed on Android phones sold by both companies , closing the door to other search engines as standard.
This exclusivity approach raised the barriers to entry for rivals seeking to gain market share through factory agreements, a key channel in the Android ecosystem due to its impact on the user's default choice.
Furthermore, the sharing of advertising revenue created economic incentives to maintain the status quo, prolonging the effect of the agreements beyond the simple initial setup of the devices.
In parallel, and in a convergent line with what has now been announced by Google, Telstra, Optus and TPG had already made commitments last year not to renew or sign similar agreements that limit the presence of competing search engines.
What the ACCC says and what remains to be decided
ACCC Chair Gina Cass-Gottlieb says that such practices restrict consumer choice and can lead to higher costs or inferior services . The regulator emphasizes that its goal is to protect effective competition in digital markets.
At present, there is no final penalty : the Federal Court must decide whether the agreed amount is appropriate or whether a different amount should be set. This judicial review will consider the seriousness of the conduct and its impact on the Australian market.
Google, for its part, has indicated that it cooperated with the investigation and that the clauses in question have not been part of its contracts for some time , although it does not agree with all of the regulator's findings.
The case occurs in a context where AI-based search tools are transforming the way we access information, a scenario in which the ACCC considers that keeping markets open is increasingly important to foster innovation and competition.
Commitments and effects for users and the sector
In addition to the proposed payment, Google has also committed to removing pre-installation and default search engine restrictions in its contracts with Android manufacturers and carriers in order to facilitate the presence of alternatives.
The regulator argues that this result opens the door to more options for millions of users in Australia and offers greater visibility to other search providers , which could lead to more innovation and quality improvements.
If the sanction is confirmed and the contractual changes materialize, the new Android devices marketed by telecoms should not be tied to a single search engine , favoring more informed decisions tailored to each person's preferences.
It remains to be seen how industry players will react and whether Google's rivals will take advantage of the new scenario to close distribution deals that boost adoption without replicating exclusionary practices.