Google Accepts $55 Million Penalty for Anti-Competitive Conduct in Australia

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Google has agreed to pay a $55 million penalty after acknowledging concerns over potentially anti-competitive conduct involving exclusive agreements with Australian telecommunications companies Telstra and Optus. Between December 2019 and March 2021, Google arranged for its search engine to be the default pre-installed option on Android smartphones sold by these carriers. In return, Telstra and Optus received a share of the advertising revenue generated from searches conducted through Google Search on the devices.

The Australian Competition and Consumer Commission (ACCC) initiated proceedings in the Federal Court, arguing that these arrangements substantially reduced competition in the market. Google did not contest the allegations and worked with the ACCC to jointly propose the penalty to the court. The court will now determine whether the proposed financial penalty and other associated orders are appropriate to address the conduct.

In addition to the financial penalty, Google has provided enforceable undertakings aimed at addressing wider competition concerns. These include removing certain pre-installation and default search engine restrictions from contracts with device manufacturers and telecommunications companies in Australia. Telstra, Optus, and TPG have agreed not to enter similar exclusive arrangements in the future, ensuring competing search providers can access a fairer platform.

ACCC Chair Gina Cass-Gottlieb highlighted the importance of competition for consumer benefit, noting that conduct which restricts competition typically leads to less choice, higher costs, and diminished service quality. She emphasized that the changes resulting from this case could provide Australians with more options for search engines and allow other providers to compete on a level playing field. Cass-Gottlieb also noted that advances in artificial intelligence are transforming search tools, offering further opportunities for competition and innovation in the market.

The ACCC’s actions form part of its broader Digital Platform Services Inquiry, which identified concerns regarding default search arrangements and user choice. The inquiry has focused on ensuring that digital platforms operate fairly and that consumers have meaningful options when using technology services. The commission remains committed to tackling anti-competitive conduct and promoting competitive markets in the digital economy.

The Federal Court is expected to review the proposed penalty and undertakings in the coming months. The outcome may influence how digital platforms engage with telecommunications companies in Australia, particularly regarding pre-installed software and search engine defaults on devices. The case also reinforces growing scrutiny of major technology firms, reflecting regulators’ efforts to maintain fair competition and protect consumers.

This development adds to recent challenges faced by Google in Australia, including court cases brought by other companies and increased regulation of platforms like YouTube. Industry observers note that the case could set an important precedent for how anti-competitive conduct is addressed in the digital sector. The decision will be closely watched by consumers, businesses, and regulators as it may shape future policy and enforcement actions.

As the digital landscape continues to evolve, regulatory oversight remains essential in maintaining competitive markets. The ACCC’s enforcement actions demonstrate its commitment to ensuring that large technology companies operate fairly, providing Australian consumers and businesses with equitable access to digital services and fostering a competitive environment in the rapidly changing technology sector.