Google has admitted to engaging in anti-competitive conduct in Australia related to exclusive agreements with Telstra and Optus for pre-installing Google Search on Android phones. The agreements, which were in place between December 2019 and March 2021, required the two telcos to exclusively pre-install Google Search and not other search engines. In exchange, Google gave the two companies a portion of its ad revenue from searches conducted on these devices.
The admission from the search giant was made as part of Federal Court proceedings where Google has agreed to a joint submission for a $55 million penalty. However, the court is still to determine if this penalty and other orders are appropriate.
In addition to admitting anti-competitive behavior, Google has signed a court-enforceable undertaking with the Australian Competition & Consumer Commission (ACCC) to address broad competition concerns from 2017 onwards. An important caveat to note is that Google doesn’t agree with the ACCC’s broad concerns but has offered to resolve them.
As part of this undertaking, Google commits to removing certain pre-installation and default search engine restrictions from its contracts with Android phone manufacturers and telcos.
ACCC Chair Gina Cass-Gottlieb said that the outcome will create the “potential for millions of Australians to have greater search choice.” She said that the agreements were illegal because they can lead to less choice and worse service for consumers. She also said that the decision allows telcos to configure search services on a device-by-device basis and enter into agreements with other search providers.
The ACCC’s investigation followed concerns that arose during its Digital Platform Services Inquiry. The inquiry’s reports highlighted a need for a new regulatory regime that promotes competition in digital platform services and addresses issues like exclusive pre-installation agreements. The ACC has also recommended a framework for mandatory service-specific codes for designated digital platforms to address competition issues.
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