The ACCC has commenced Federal Court proceedings against Google Asia Pacific over anti-competitive understandings that Google admits it reached in the past with Telstra and Optus regarding the pre-installation of Google Search on Android mobile phones.
Google has co-operated with the ACCC, admitted liability and agreed to jointly submit to the Court that Google should pay a total penalty of $55 million. It is a matter for the Court to determine whether the penalty and other orders are appropriate.
The understandings, which were in place between December 2019 and March 2021, required Telstra and Optus to only pre-install Google Search on Android phones they sold to consumers, and not other search engines.
In return, 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 in reaching those understandings with each of Telstra and Optus it was likely to have had the effect of substantially lessening competition.
Google and its US parent company, Google LLC, have also signed a court-enforceable undertaking which the ACCC has accepted to address the ACCC’s broader competition concerns relating to contractual arrangements between Google, Android phone manufacturers and Australian telcos since 2017. Google does not agree with all of the ACCC’s concerns but has acknowledged them and offered the undertaking to address these concerns.
In the undertaking, Google commits to removing certain pre-installation and default search engine restrictions from its contracts with Android phone manufacturers and telcos.
Google’s undertaking is in addition to court-enforceable undertakings provided by Telstra, Optus and TPG last year. The ACCC accepted these telco undertakings to resolve concerns about the telcos’ agreements with Google. The telcos are not parties to the proceedings commenced today.
“Conduct that restricts competition is illegal in Australia because it usually means less choice, higher costs or worse service for consumers,” ACCC Chair Gina-Cass Gottlieb 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.”
“Importantly, these changes come at a time when AI search tools are revolutionising how we search for information, creating new competition,” Cass-Gottlieb said.
In the court-enforceable undertakings that the ACCC accepted from Telstra and Optus (in June 2024) and TPG (in August 2024), the companies undertook not to renew or make new arrangements with Google that require its search services to be pre-installed and set as the default search function on an exclusive basis on Android devices they supply.
The three telcos can configure search services on a device-by-device basis, and in ways that may not align with the settings set by Google. They can also enter into pre-installation agreements with other search providers.
“With AI search tools becoming increasingly available, consumers can experiment with search services on their mobiles,” Cass-Gottlieb said.
Today’s proceedings follow a lengthy ACCC investigation, after broader concerns about Google’s contractual arrangements for Google Search emerged during the ACCC’s Digital Platform Services Inquiry’s report into search defaults and choice screens.
“Co-operation with the ACCC is encouraged. It can avoid the need for protracted and costly litigation and lead to more competition. More competition in markets drives economic dynamism, but the reverse is true when markets are not sufficiently competitive,” Cass-Gottlieb said.
“The ACCC remains committed to addressing anti-competitive conduct like this, as well as cartel conduct. Competition issues in the digital economy are a current priority area.”
