Competition watchdog the ACCC has struck a deal with Google over anti-competitive behaviour in a deal with Telstra and Optus to pre-instal Google Search on Android mobile phones, agreeing to a $55 million penalty.
The deal now needs to be ratified by the Federal Court, which will decide if the penalty is appropriate.
Google co-operated with the ACCC, admitted liability and agreed to jointly submit to the Court that the tech giant should pay $55 million.
The arrange with the two telcos ran between December 2019 and March 2021 and meant they would only pre-install Google Search on Android phones they sold. In return, Telstra and Optus received a share of the revenue Google generated from ads displayed on the phones.
Google and its US parent, Google LLC, also signed a court-enforceable undertaking to address the regulator’s broader competition concerns about 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.
The undertaking to the ACCC means Google will remove certain pre-installation and default search engine restrictions from its contracts with Android phone manufacturers and telcos, following on from court-enforceable undertakings provided by Telstra, Optus and TPG last year.
The telcos are not parties to the Federal Court proceedings the ACCC launched on MOnday
ACCC 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.
“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,” she said.
“Importantly, these changes come at a time when AI search tools are revolutionising how we search for information, creating new competition.”
The latest action follows an 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.
“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,” Cass-Gottlieb said.
In response, the CEO of communications consumer body ACCAN, Carol Bennett, said the latest legal action against Google was clear signal that digital competition reforms are urgently needed.
“Google already has a virtual monopoly on search – and now we have confirmation that they were providing kickbacks to telcos to further entrench their market power,” she said
“In most industries, companies wouldn’t dare try something like this. Tech giants are acting like the rules don’t apply to them.”
“We need real digital competition laws that stop these problems before they start. Consumers and small businesses shouldn’t be left cleaning up the mess after global tech companies misuse their market power.”
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