Google admits anti-competitive deals with Telstra and Optus in Australia

Google has admitted to anti-competitive conduct in Australia after striking deals with telcos Telstra and Optus to block rival search engines from Android phones sold between 2019 and 2021.

Under the arrangements, Telstra and Optus agreed to exclusively pre-install Google Search on Android devices they sold, ensuring no competing search engines were available “out-of-the-box.” In exchange, both telcos received a share of the revenue Google generated from ads displayed to consumers using Google Search on those devices.

"Today's outcome ... created the potential for millions of Australians to have greater search choice in the future, and for competing search providers to gain meaningful exposure to Australian consumers," ACCC Chair Gina-Cass Gottlieb said in a statement to Reuters.

Google and the ACCC have jointly submitted to the Federal Court that Google should pay the A$55 million (US$35.8 million) fine. The Court will decide whether to impose that fine.

Google and its US parent have also signed a legally binding undertaking with the ACCC to strip out certain pre-installation and default search engine restrictions from its contracts with Android phone manufacturers and telcos. The tech giant does not agree with all of the ACCC’s concerns but has acknowledged them and offered the undertaking to address these concerns.

Telstra, Optus and TPG gave similar commitments last year. The ACCC also pointed to the growing relevance of AI search tools and noted that competition in search has shifted as the likes of Microsoft’s Copilot, OpenAI’s ChatGPT, and emerging local players compete for users. 

“With AI search tools becoming increasingly available, consumers can experiment with search services on their mobiles,” said Cass-Gottlieb.

The case stems from the ACCC’s five-year inquiry into digital platforms, which flagged search defaults as a major barrier for rivals. 

The growing antitrust heat against Google

For Google, this is the latest in a string of global challenges to its dominance in search, as regulators across Asia, the US, and Europe push back against default deals that entrench market share.

In April, Japan’s Fair Trade Commission issued its first-ever landmark cease-and-desist order against a foreign tech giant. It forced Google to end anticompetitive contracts that mandated its search engine and browser be pre-installed and positioned prominently on Android devices. Google must now appoint an independent monitor and submit annual compliance reports for five years.

Similarly, in India, the regulatory watchdog Competition Commission of India (CCI) greenlit a ₹20.24 crore (~US$2.38 million) settlement for Google over forced bundling of its Play Store and apps on Android SmartTVs in April. 

Under the agreement, Google needs to offer standalone licenses and allow original equipment manufacturers (OEMs) to ship TVs without Google apps, including alternative OS options. In another landmark 2022 case, Google copped a fine of ₹1,337.76 crore (~US$162 million) over Android mobile bundling across smartphones.