Australia – The Australian Competition and Consumer Commission (ACCC) has launched Federal Court proceedings against Google Asia Pacific, after the company admitted to anti-competitive conduct involving agreements with Telstra and Optus over the pre-installation of Google Search on Android mobile phones.
Google has admitted liability and agreed to jointly submit with the ACCC that it should pay a $55 million penalty, subject to the Court’s decision on whether the proposed penalty and other orders are appropriate.
The arrangements, in effect between December 2019 and March 2021, required Telstra and Optus to exclusively pre-install Google Search on Android devices sold to consumers. In return, the telcos received a share of Google’s advertising revenue generated through searches made on those phones.
Google acknowledged that these agreements were likely to substantially lessen competition in the market. Alongside the proceedings, Google and its parent company, Google LLC, have signed a court-enforceable undertaking accepted by the ACCC to address wider competition concerns around contracts with Android manufacturers and Australian telcos since 2017. Under the undertaking, Google has committed to removing certain pre-installation and default search restrictions from its agreements.
This follows similar undertakings accepted last year from Telstra, Optus and TPG, which committed not to enter exclusive arrangements with Google requiring its search service to be the sole pre-installed and default option on Android devices.
“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,” Ms Cass-Gottlieb said.
The ACCC noted that the undertakings now allow telcos to configure search services on a device-by-device basis and strike pre-installation deals with alternative providers.
“With AI search tools becoming increasingly available, consumers can experiment with search services on their mobiles,” Cass-Gottlieb said.
The proceedings stem from the ACCC’s broader Digital Platform Services Inquiry, which identified concerns around 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,” Ms Cass-Gottlieb added.
“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.”
