Google has settled a case with the Australian Competition and Consumer Commission (ACCC) over anticompetitive agreements with Telstra and Optus, the country’s two largest telecommunications firms. The tech giant has agreed to pay a fine of 55 million Australian dollars ($36 million).

The ACCC’s Findings

The ACCC found that Google’s Asia Pacific division signed contracts with Telstra and Optus that prohibited the installation of rival search engines on Android smartphones sold to customers. These deals, which lasted for 15 months until March 2021, ensured Google Search was the sole pre-installed option. In return, the telcos received a share of advertising revenue generated from users’ searches.

Google’s Admission and Penalty

Google has accepted that the agreements were likely to “substantially lessen competition.” The ACCC has launched proceedings in the Federal Court to determine whether the AU$55 million penalty is appropriate. In addition to the fine, Google has signed a court-enforceable undertaking requiring it to remove restrictions on pre-installation and default search engine options from future contracts with Android phone manufacturers and telecom operators.

ACCC Chair’s Statement

ACCC chair Gina Cass-Gottlieb welcomed the outcome, warning that anti-competitive conduct harms consumers. “Conduct that restricts competition is illegal in Australia because it usually means less choice, higher costs or worse service,” she said. “Importantly, these changes come at a time when AI search tools are revolutionizing how we search for information, creating new competition.”

Industry Impact

The settlement comes after Telstra, Optus, and rival TPG agreed to court-enforceable undertakings with the regulator, pledging not to renew or enter into similar deals with Google that limit search engine options. Google said it is pleased to resolve the ACCC’s concerns, noting that the restrictive provisions have not been part of its commercial agreements for some time.