ACCC hits Google with $55m fine for anti-competitive telco deals

Google has admitted to anti-competitive search agreements in Australia and has agreed with the ACCC that it should pay a multimillion-dollar fine.

Tech giant Google is facing a $55 million fine after admitting to entering into exclusive agreements with two of Australia’s largest telcos between December 2019 and March 2021.

This follows the Australian Competition and Consumer Commission’s (ACCC) commencement of Federal Court proceedings against Google Asia-Pacific over anti-competitive agreements it admitted to reaching in the past with two of Australia’s largest telcos: Telstra and Optus.

The agreements involved the exclusive pre-installation of Google Search on Android mobile phones sold by these telcos, effectively blocking rival search engines and restricting competition.

In return, the telcos received a share of the revenue generated from ads displayed when users accessed Google Search on their Android phones.

Google admitted that these arrangements were likely to have substantially lessened competition in the market.

During Monday’s (18 August) Federal Court proceedings, Google admitted to anti-competitive agreements, accepted liability, and agreed with the ACCC to submit that it should pay a total penalty of $55 million.

The Federal Court has yet to determine whether the proposed penalty and any additional orders are appropriate.

Under court-enforceable undertakings accepted by the ACCC from Telstra and Optus in June 2024 and TPG in August 2024, the companies committed not to renew or enter into new agreements with Google that would require its search services to be pre-installed and set as the default on an exclusive basis for the Android devices they supply.

In addition to the multimillion-dollar fine, Google and its US parent company, Google LLC, have signed a court-enforceable undertaking to address broader ACCC concerns regarding contractual arrangements with Android phone manufacturers and Australian telcos dating back to 2017.

While the tech giant does not agree with all of the ACCC’s concerns, it has acknowledged them and offered the undertaking to address these issues.

Under the agreement, Google has committed to removing certain pre-installation and default search engine restrictions from its contracts, allowing for greater consumer choice.

“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.”