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Google has agreed to pay a penalty of AU$55 million (US$36 million) after Australia’s competition authority found the company had engaged in anti-competitive conduct. The case centred on deals struck with leading telecom providers Telstra and Optus, requiring them to pre-install Google’s search engine exclusively on Android devices sold in Australia.

The Australian Competition and Consumer Commission (ACCC) announced that it had filed proceedings in the Federal Court. Both Google Asia Pacific and the regulator jointly submitted that the tech giant should pay the fine. The Federal Court will now review whether the proposed penalty and related orders are appropriate.

ACCC: Less Choice, Higher Costs, Worse Service

According to ACCC Chair Gina Cass-Gottlieb, the conduct was designed to restrict competition, which is illegal under Australian law.

“Conduct that restricts competition is illegal in Australia because it usually means less choice, higher costs or worse service for consumers,” Gottlieb said.

The watchdog revealed that the deals, active between December 2019 and March 2021, granted Telstra and Optus a share of advertising revenue generated through Google search. In return, both companies agreed to exclusively pre-install Google’s search engine on Android devices, limiting opportunities for rival search engines to compete.

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Google Admits Breach and Cooperates

Google has admitted that its arrangements with Telstra and Optus were likely to substantially lessen competition in the search market. However, the company also emphasised that the provisions in question had not featured in its commercial agreements “for some time”.

A Google spokesperson stated:

“We are pleased to have resolved the regulator’s concerns over these provisions. We are committed to providing Android device makers more flexibility to preload browsers and search apps.”

This admission and cooperation with the ACCC were key factors in reaching the agreed settlement.

Telstra and Optus Agree to Stop Exclusive Deals

The ACCC further Telstra and Optus had already made enforceable court agreements in 2023. Under these agreements both telecom operators undertook not to enter into similar agreements with Google or any other company in the future.  

This further development provides assurance that Australian users of Android devices will, in the future, have a wider selection of search engines and browsers that can be pre-installed on their devices.

Broader Implications for Big Tech

The case in question indicates the attention directed towards big tech companies in Australia and the rest of the world. There have been complaints from different parts of the world regarding the monopolistic tendencies of Google in the search and digital advertising industries. With lack of competition, companies such as Google are, according to regulators, able to manipulate user engagement and limit creativity within the digital ecosystem.  

Australia’s decision comes at the same time as numerous other competition law investigations being conducted on Google, Apple, Amazon, and Meta. Google has already incurred several billions in fines for his conduct in the EU for using Android to search and advertise.

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What This Means for Consumers

As for Australian customers, the decision by the ACCC may result in greater contending of search engines as well as wider array of default applications. There may as well be better services, increased innovation, and enhanced pricing structures throughout the digital advertising ecosystem.  

Even though Google still holds the title for the most used search engine in the world, their competition and regulatory fines will make it difficult to maintain their market dominance. By issuing this lawsuit, it ought to be aimed at Google’s unilateral deals in conjunction with other companies. Furthermore, other practices of Google have to be in line with competition law and the principle of competition.

Final Thoughts

Australia’s AUD 55 million fine against Google serves as another reminder that the company’s AU business model is heavily scrutinized. Although the fine is trivial in comparison to Google's revenues, the case serves as a reminder that restricting competition through exclusive contracts will not be permitted. 

With Telstra and Optus not permitted to enter into the partnership, and Google committing to more flexibility with Android partners, the decision may promote improved competition within Australia’s digital ecosystem.