Google Agrees to $35.8 Million Penalty Over Australia Telco Agreements

Google has agreed to pay a significant penalty to resolve a major competition dispute in Australia. Google’s fine in Australia amounts to $35.8 million after the consumer watchdog found the tech giant guilty of harming competition by paying two of the largest telecom companies to pre-install its search engine, Reuters reported.

What Led to the Fine

The Australian Competition and Consumer Commission (ACCC) found that Google was fined due to anti-competitive business practices. Between last 2019 and early 2021, Google made deals with Telstra and Optus, Australia’s two biggest phone companies. These agreements required the telcos to pre-install only Google Search on Android phones they sold to customers. Google also faced antitrust charges by the EU in March this year.

Google’s anti-competitive deals worked by sharing advertising revenue with phone companies. When customers used Google Search on their Android phones, Google would split the money earned from ads with Telstra and Optus. This arrangement effectively blocked other search engines from competing fairly in the Australian market. Moreover, earlier this month, the Competition Commission of India (CCI) also investigated Google’s online Ad Practices in India.

Google’s spokesperson replied that the tech giant is pleased to resolve ACCC’s concerns, which included “provisions that haven’t been in our commercial agreements for some time.”

The spokesperson added, “We are committed to providing Android device makers more flexibility to pre-load browsers and search apps, while preserving the offerings and features that help them innovate, compete with Apple, and keep costs low.”

Impact on Competition

ACCC Chair Gina Cass-Gottlieb explained that these deals had serious consequences for competition. “Today’s outcome … 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 stated.

Google’s pre-installation penalty addresses concerns about market dominance in the search engine sector. By requiring phones to come with only Google Search pre-installed, other search providers like Bing, DuckDuckGo, or Yahoo had much less chance to reach Australian consumers.

Google admitted that these agreements had a significant impact on competition from other search engines. It has stopped making similar deals and agreed to pay the fine, the ACCC said.

Legal Process

ACCC’s fine on Google still needs final approval from the Federal Court. Google and the ACCC have jointly submitted their agreement to the court, requesting approval for the $35.8 million penalty. This joint submission shows that both parties have reached a mutually acceptable resolution.

This case represents part of a global trend where regulators are taking stronger action against big tech companies. The fine sends a clear message that anti-competitive behavior will face serious consequences, even from the world’s largest technology firms.

The decision also highlights Australia’s commitment to maintaining fair competition in digital markets. By taking action against these exclusive arrangements, the ACCC aims to ensure that consumers have real choices when it comes to search engines and other digital services.