The Australian Competition and Consumer Commission (ACCC) has commenced Federal Court proceedings against Google Asia Pacific over anti-competitive agreements with Telstra and Optus regarding the exclusive pre-installation of Google Search on Android mobile phones.

Google has cooperated with the ACCC investigation, admitted liability, and agreed to a joint submission for a $55 million penalty.

The final penalty determination rests with the Federal Court, which will assess whether the proposed amount and other orders are appropriate.

The anti-competitive understandings operated between December 2019 and March 2021, requiring Telstra and Optus to exclusively pre-install Google Search on Android phones sold to consumers while prohibiting other search engines.

In exchange, the telecommunications companies received revenue shares from advertising generated when consumers used Google Search on their devices.

Google and its US parent company, Google LLC, have signed a court-enforceable undertaking to address the ACCC’s broader competition concerns relating to contractual arrangements with Android phone manufacturers and Australian telecommunications companies since 2017.

The undertaking commits Google to remove certain pre-installation and default search engine restrictions from its contracts with Android manufacturers and telecommunications providers.

This change supplements court-enforceable undertakings previously provided by Telstra, Optus, and TPG, which the ACCC accepted to resolve concerns about the telecommunications companies’ agreements with Google.

ACCC Chair Gina Cass-Gottlieb said the conduct was illegal because it typically results in “less choice, higher costs or worse service for consumers.”

She emphasised that the outcome, combined with telecommunications company undertakings, creates potential for millions of Australians to have greater search choice and for competing search providers to gain meaningful exposure.

The changes arrive as artificial intelligence search tools revolutionise information searching, creating new competitive opportunities.

The telecommunications companies can now configure search services on individual devices and enter pre-installation agreements with alternative search providers.

Under their undertakings, Telstra, Optus, and TPG committed not to renew or create new exclusive arrangements requiring Google’s search services to be pre-installed and set as default on Android devices they supply.

The proceedings follow an extensive ACCC investigation that emerged from broader concerns about Google’s contractual arrangements identified during the Digital Platform Services Inquiry’s examination of search defaults and choice screens.

Cass-Gottlieb noted that cooperation with the ACCC can avoid protracted litigation and promote increased competition, which drives economic dynamism.

She emphasised that competition issues in the digital economy remain a current priority area for the commission.

The case represents part of the ongoing global scrutiny of major technology companies’ market practices and their impact on consumer choice and competition in digital services.