Google pays $55 million for anti-competitive telco deals in Australia

The Australian Competition and Consumer Commission announced on August 18, 2025, that Google Asia Pacific will pay A$55 million in penalties following Federal Court proceedings over anti-competitive understandings with telecommunications companies Telstra and Optus. The arrangements required these carriers to exclusively pre-install Google Search on Android devices sold to consumers, preventing rival search engines from gaining access to these distribution channels.

According to the ACCC, Google admitted liability and cooperated with the investigation, acknowledging that its arrangements with Telstra and Optus were "likely to have had the effect of substantially lessening competition." The understandings operated between December 2019 and March 2021, covering a critical period when Android devices consolidated their market position in Australia.

Under the revenue share agreements examined in the case, Google Asia Pacific provided Telstra and Optus with a portion of advertising revenue generated when users conducted searches on their Android devices. In exchange, both telecommunications companies agreed to platform-wide provisions that required all search access points on devices to utilize Google Search "out-of-the-box." The arrangements also prohibited the carriers from implementing, preloading, or suggesting any general search engine service substantially similar to Google Search.

ACCC Chair Gina-Cass Gottlieb stated that the outcome creates "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." The regulator emphasized that conduct restricting competition typically results in less choice, higher costs, or worse service for consumers.

The case emerged from the ACCC's extensive Digital Platform Services Inquiry, which examined competition and consumer issues across search services, social media, app marketplaces, cloud computing, and artificial intelligence markets. The five-year investigation produced 14 reports and concluded with 35 recommendations for regulatory reform on March 31, 2025.

Google's admission covers two separate understandings reached in December 2019. The first understanding involved Google Asia Pacific and Telstra Limited, while the second covered arrangements with Optus Mobile Pty Limited. Both agreements contained provisions requiring continuation of existing revenue share terms until new arrangements could be negotiated, effectively extending the exclusivity requirements during a 16-month period.

The platform-wide provisions examined in the proceedings established significant barriers for alternative search providers seeking distribution on Android devices. These provisions required that devices supplied by Telstra and Optus configure all search access points to utilize Google Search by default. The arrangements prevented carriers from presenting, introducing, or suggesting competing general search engine services to device users.

PPC Land reported that the ACCC's inquiry identified concerns about Google's vertical integration across advertising markets. The commission noted that Google operates across the advertising supply chain through search advertising, display advertising networks, and ad tech services, enabling it to compete with publishers and advertisers while controlling infrastructure dependencies.

The Federal Court proceedings commenced on August 18, 2025, with case number VID1055/2025 filed in the Victoria Registry. Google Asia Pacific and Google LLC jointly proposed the A$55 million penalty in submissions to the Federal Court, though the court must still determine whether the penalty and associated orders are appropriate. The proceedings follow established precedent for cooperative resolution of competition matters in Australia.

In addition to the penalty, Google LLC and Google Asia Pacific provided court-enforceable undertakings to address broader competition concerns relating to contractual arrangements with Android device manufacturers and Australian telecommunications companies since 2017. The undertaking commits Google to removing certain pre-installation and default search engine restrictions from future contracts.

The undertaking establishes device-by-device and search access point-by-search access point flexibility for Android original equipment manufacturers and mobile network operators. Under the new arrangements, carriers can choose whether to preload, place, promote, or set Google Search as the default for search access points on individual devices without affecting revenue entitlements for other search access points.

Google's undertaking also addresses restrictions on third-party search providers. The company committed not to condition consideration or licensing arrangements on Android manufacturers or carriers refraining from developing, distributing, preloading, placing, promoting, or licensing general search engine services from competing providers. This change removes barriers that previously prevented carriers from offering alternative search options to consumers.

The arrangements include provisions for Google Mobile Services licensing flexibility. Under the undertaking, Google cannot condition licensing of Google Play or other software on manufacturers distributing, preloading, placing, or licensing Google Search applications or Chrome Browser applications on Android devices supplied in Australia.

Telstra, Optus, and TPG previously provided their own undertakings to the ACCC in June and August 2024. These telecommunications companies committed not to renew or establish new arrangements requiring Google's search services to be pre-installed and set as default search functions on an exclusive basis. The carriers can now configure search services on individual devices and enter into pre-installation agreements with alternative search providers.

The case reflects broader regulatory scrutiny of digital platform market power across global jurisdictions. PPC Land documented Google's continued dominance with 87% global market share in the first quarter of 2025, rising to 92.23% in the Australian market specifically.

Google's compliance obligations include establishing a competition law compliance program overseen by independent auditors. The company must appoint compliance auditors within 21 days of the Federal Court's final orders and produce detailed audit reports throughout the three-year undertaking period. The auditing requirements cover all agreements with Android manufacturers and mobile network operators relating to search services, device configuration, and revenue sharing arrangements.

The ACCC's investigation utilized powers under the Digital Platform Services Inquiry, which operated under ministerial direction from 2020 through March 2025. The inquiry examined market concentration, barriers to entry, and competitive dynamics affecting digital platform services. The commission published interim reports examining app marketplaces, search defaults, online retail, social media services, and data products throughout the investigation period.

Mobile Application Distribution Agreements with Android manufacturers represented another aspect of the competition concerns. These agreements required manufacturers to place Google Search widgets on home screens and Chrome Browser applications in folders as conditions for preinstalling Google Mobile Services applications. While these agreements did not restrict manufacturers from installing non-Google applications, they secured prominent placement for Google's search services.

Revenue Share Agreements with six Android manufacturers between 2017 and 2024 provided opportunities for device makers to earn revenue by promoting Google Search configurations. Unlike the arrangements with telecommunications companies, these manufacturer agreements operated on device-by-device basis and did not include platform-wide exclusivity provisions equivalent to those affecting Telstra and Optus.

The ACCC's findings highlighted how obtaining default rights and preinstallation rights on Android devices represents a key distribution channel for search providers. The commission determined that contractual arrangements securing these rights prevented or hindered mobile network operators from granting similar rights to third-party search providers, effectively limiting consumer choice in search services.

Competition concerns extended to advertising technology markets where Google maintains positions across multiple levels of the supply chain. The ACCC identified issues related to self-preferencing in advertising auctions and transparency in pricing mechanisms. These vertical integration concerns affect competition between advertising technology providers and pricing structures for advertisers and publishers.

The case establishes precedent for enforcement action against exclusive dealing arrangements in digital platform markets. The ACCC's approach demonstrates regulatory willingness to challenge arrangements that limit distribution opportunities for competing services, particularly in markets with high barriers to entry and network effects.

Google's cooperation with the ACCC investigation contrasts with more adversarial approaches in other jurisdictions. The company's willingness to admit liability and propose penalties enabled resolution without protracted litigation that could have exposed additional details about revenue sharing models and competitive strategies across platform markets.

Timeline

• December 2017: Google begins Mobile Application Distribution Agreements with Android manufacturers in Australia
• December 2019: Google Asia Pacific reaches understandings with Telstra and Optus extending revenue share agreements with platform-wide provisions
• March 2021: Platform-wide provision arrangements with Telstra and Optus conclude
• June 2024: ACCC accepts undertakings from Telstra and Optus regarding future Google arrangements
• August 2024: TPG provides undertaking to ACCC
• August 18, 2025: ACCC commences Federal Court proceedings against Google Asia Pacific and announces A$55 million penalty agreement
• March 31, 2025: ACCC concludes Digital Platform Services Inquiry with 35 recommendations

PPC Land explains

Android Devices: Mobile phones and tablets that operate on Google's Android operating system. In this case, Android devices represented the primary distribution channel for search services, as Google required its search engine to be pre-installed and set as the default option on devices sold by Telstra and Optus. The significance lies in Android's dominant market position, powering over 70% of smartphones globally, making control over search defaults on these devices a crucial competitive advantage.

Platform-wide Provisions: Contractual clauses that required telecommunications companies to configure all search access points on Android devices to utilize Google Search exclusively. These provisions prevented carriers from implementing, preloading, or suggesting any competing search engine service that was substantially similar to Google Search. The term "platform-wide" indicated that restrictions applied across entire device ranges rather than individual models, creating comprehensive barriers for rival search providers.

Revenue Share Agreements: Commercial arrangements where Google Asia Pacific provided Telstra and Optus with a portion of advertising revenue generated when users conducted searches on their Android devices. These agreements created financial incentives for telecommunications companies to maintain Google's search dominance while generating additional income streams from device sales. The revenue sharing model effectively compensated carriers for excluding competing search services.

Search Access Points: Various methods through which users can enter search queries on Android devices, including search widgets, browser address bars, voice assistants, and application interfaces. Control over these access points determines which search engine receives user queries by default. Google's arrangements ensured that all such access points directed users to Google Search rather than alternative providers like Microsoft Bing or DuckDuckGo.

Google Mobile Services: A comprehensive suite of proprietary mobile applications including Google Search, Chrome Browser, Google Play Store, YouTube, Gmail, and Google Maps. Manufacturers must license Google Mobile Services to access the Google Play Store, creating leverage for Google to secure favorable placement for its search services. The bundling of these services with search requirements represented a key aspect of Google's competitive strategy.

Competition and Consumer Act: Australia's primary competition law, administered by the ACCC, which prohibits anti-competitive agreements and conduct that substantially lessens competition in markets. Section 45 of the Act specifically addresses arrangements between companies that have the purpose, effect, or likely effect of restricting competition. Google's admission of liability under this legislation represents a significant enforcement precedent for digital platform markets.

ACCC Digital Platform Services Inquiry: A comprehensive five-year investigation examining competition and consumer issues across digital platform markets including search services, social media, app marketplaces, cloud computing, and artificial intelligence. The inquiry produced 14 reports and 35 recommendations for regulatory reform, providing the foundation for enforcement action against Google's arrangements with telecommunications companies.

Court-enforceable Undertakings: Legally binding commitments provided by companies to regulators that can be enforced through court proceedings if breached. Google's undertakings commit the company to removing pre-installation and default search engine restrictions from future contracts with Android manufacturers and telecommunications companies. These undertakings provide ongoing regulatory oversight beyond the immediate penalty.

Default Search Engine: The search service automatically configured to receive user queries when no alternative is specifically selected. Default settings significantly influence user behavior, as most consumers do not change pre-configured options on their devices. Control over default search engine placement represents a crucial competitive advantage in digital markets, as it determines which service receives the majority of search traffic.

Anti-competitive Conduct: Business practices that restrict, limit, or eliminate competition in markets, typically resulting in higher prices, reduced innovation, or fewer choices for consumers. In this case, Google's exclusive arrangements prevented rival search engines from accessing distribution channels on Android devices, limiting consumer choice and hindering competition in general search engine services markets. Such conduct violates competition laws when it substantially lessens competition.

Summary

Who: Google Asia Pacific Pte. Ltd., Google LLC, Australian Competition and Consumer Commission, Telstra Limited, Optus Mobile Pty Limited, and TPG Telecom Limited.

What: Federal Court proceedings over anti-competitive understandings requiring exclusive pre-installation of Google Search on Android devices sold by telecommunications companies, resulting in A$55 million penalty and court-enforceable undertakings.

When: The anti-competitive arrangements operated between December 2019 and March 2021, with ACCC proceedings commenced on August 18, 2025.

Where: Australia, affecting Android mobile devices sold by Telstra and Optus to consumers across the country, with Federal Court proceedings filed in Victoria Registry.

Why: The arrangements substantially lessened competition by preventing rival search engines from accessing distribution channels on Android devices, limiting consumer choice and hindering competition in general search engine services markets.