Internet giant Google could pay a $55 million fine after signing anti-competitive deals with Australia’s two largest telcos that banned the installation of competing search engines on some smartphones.
The Australian Competition and Consumer Commission launched proceedings against the US technology firm in Federal Court on Monday over the behaviour, which Google has admitted.
The court will be asked to determine if the $55 million penalty agreed by both parties is appropriate.
The legal action follows court-enforceable undertakings from Telstra, Optus and TPG in 2024 to refrain from renewing or making similar deals with Google to limit search services.
The anti-competitive deals, in place between December 2019 and March 2021, required Telstra and Optus to pre-install Google’s Search app on Android smartphones and to exclude competing search services from the devices.
In exchange, the telcos received a share of revenue from advertisements shown alongside Google’s search results on the phones.
The deals struck by the technology companies unfairly restricted consumers’ access to search engine options, commission chair Gina Cass-Gottlieb said.
“Conduct that restricts competition is illegal in Australia because it usually means less choice, higher costs or worse service for consumers,” she said.
“Today’s outcome along with Telstra, Optus and TPG’s undertakings have 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.”
In addition to admitting the deals could have reduced competition, Google has agreed not to require similar restrictions on search services in future contracts with smartphone manufacturers and telecommunication providers.
The changes would become increasingly important, Ms Cass-Gottlieb said, as the search engine market was challenged by firms deploying artificial intelligence to deliver different results.
“With AI search tools becoming increasingly available, consumers can experiment with search services on their mobiles,” she said.
The Federal Court in Victoria will determine whether the $55 million is appropriate and if “other relief” should apply.
Google Australia issued a statement about the case on Monday, saying similar agreements that restricted search services from other companies were no longer being sought by the company.
“We’re pleased to resolve the ACCC’s concerns, which involved provisions that haven’t been in our commercial agreements for some time,” the statement said.
“We are committed to providing Android device makers more flexibility to preload browsers and search apps, while preserving the offerings and features that help them innovate, compete with Apple and keep costs low.”
The commission investigated internet competition as part of a five-year inquiry into digital platforms, issuing its final report in March.
Google dominates search engine queries in Australia, with Statcounter Global Statistics estimating it delivered 91.7 per cent of search results in July, followed by Bing (5.6 per cent) and Yahoo (1.28 per cent).
Australian Associated Press is the beating heart of Australian news. AAP is Australia’s only independent national newswire and has been delivering accurate, reliable and fast news content to the media industry, government and corporate sector for 85 years. We keep Australia informed.
