Google Admits Anti-Competitive Conduct in Australia, Faces $55M Penalty

Google Admits Anti-Competitive Search Practices in Australia

The Australian Competition and Consumer Commission (ACCC) has secured a major victory in its ongoing battle against anti-competitive practices in the digital economy. Google Asia Pacific has admitted to engaging in anti-competitive conduct with Australian telecommunications giants Telstra and Optus regarding the pre-installation of Google Search on Android mobile phones.

$55 Million Penalty and Court-Enforceable Undertakings

Google has cooperated with the ACCC investigation, admitted liability, and agreed to jointly submit to the Federal Court that it should pay a total penalty of $55 million. The tech giant has also signed court-enforceable undertakings to address broader competition concerns relating to its contractual arrangements with Android phone manufacturers and Australian telcos dating back to 2017.

Exclusive Search Agreements with Telstra and Optus

The admitted conduct involved understandings between Google and the telecommunications companies that were in place between December 2019 and March 2021. These agreements required Telstra and Optus to exclusively pre-install Google Search on Android phones sold to consumers, effectively blocking competing search engines from being pre-loaded on these devices.

In return for this exclusivity, Telstra and Optus received a share of the revenue Google generated from ads displayed to consumers when they used Google Search on their Android phones. Google has admitted that these arrangements were likely to have substantially lessened competition in the Australian search market.

Broader Market Impact and Regulatory Response

ACCC Chair Gina Cass-Gottlieb emphasized the significance of this outcome: "Conduct that restricts competition is illegal in Australia because it usually means less choice, higher costs or worse service for consumers. 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."

The timing of these changes is particularly significant as AI search tools are revolutionizing how consumers search for information, creating new competition opportunities in the search market.

Historical Context and Ongoing Investigations

This case follows a lengthy ACCC investigation that emerged from the regulator's Digital Platform Services Inquiry, which has been examining competition issues in digital markets since 2017. The inquiry has highlighted concerns about Google's dominant market position, with the tech giant controlling approximately 94% of the search engine market share in Australia as of August 2024.

The proceedings demonstrate the ACCC's continued commitment to addressing anti-competitive conduct in the digital economy, which remains a priority area for the regulator. The cooperation from Google in this case avoided protracted and costly litigation while achieving meaningful competition outcomes.