Google Fined $36 Million in Australia Over Anticompetitive Deals With Telstra and Optus
Google has agreed to pay AU$55 million (US$36 million) after Australia’s competition regulator found it engaged in anticompetitive agreements with two of the country’s largest telecom providers, Telstra and Optus.
The Australian Competition and Consumer Commission (ACCC) announced the case in the Federal Court, which will now determine if the proposed fine is appropriate.
Google’s Exclusive Deals With Telstra and Optus
Between December 2019 and March 2021, Google entered into contracts with Telstra and Optus that restricted the installation of rival search engines on Android smartphones sold through their networks.
Under the deals, only Google Search came pre-installed as the default option, effectively blocking competitors. In return, the telcos received a share of Google’s advertising revenue generated from their users.
The ACCC stated that these arrangements limited competition and reduced consumer choice in the mobile search market.
Google’s Response and Undertakings
Google acknowledged that its agreements with the telecom providers likely reduced competition. The company has since signed a court-enforceable undertaking preventing it from imposing similar default search restrictions in future deals with manufacturers and telcos.
In a statement, Google said it was “pleased to resolve the ACCC’s concerns”, adding that such provisions are no longer part of its commercial contracts.
Impact on Australian Consumers and Competition
ACCC Chair Gina Cass-Gottlieb emphasized that restricting competition is illegal under Australian law because it often leads to higher prices, fewer choices, and lower service quality for consumers.
She noted that the decision comes at a critical time, as AI-powered search tools are reshaping the digital search industry and introducing new competitors.
Telcos Commit to Ending Restrictive Deals
Alongside Google’s undertaking, Telstra, Optus, and TPG have also signed agreements ensuring they will not engage in similar exclusive deals in the future.
This marks a significant step toward fairer competition in the Australian digital marketplace, ensuring consumers have more options when it comes to search engines on their devices.
Key Takeaways
- Google fined AU$55 million (US$36M) for anticompetitive contracts.
- Deals restricted rival search engines on Telstra and Optus Android phones.
- Agreements lasted 15 months until March 2021.
- Telcos received a share of Google’s ad revenue in exchange for exclusivity.
- Google signed a court-enforceable undertaking to avoid future restrictions.
- ACCC stresses importance of consumer choice and competition laws.
- Case highlights growing pressure on Google amid AI-driven search competition.
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