In another bout of regulatory charges, Google Asia Pacific is under charges of anti-competitive behavior in Australia. On Monday, August 18, it was confirmed that Google is to pay $35 million for its state of monopoly involving the country’s two largest telecommunications companies and its search operations.
Let’s take a deep dive into what led to the charges, why it matters, and the causal effect.
What Led to the Charges Against Google in Australia
The Australian Competition and Consumer Commission (ACCC) accused Google of making illegal deals with Telstra and Optus (Australia’s two biggest telecommunication companies) to pre-install Google Search on Android phones they sold.
The deal in question allegedly took place between December 2019 and March 2021. The nature of this deal was one that did not give room for competition for other search engines, as only Google Search was pre-installed.
In return for this, Telstra and Optus received a share of the revenue Google generated from ads, which was displayed to the customers who made use of the search engine on their Android phones.
Google admitted to the charges on Monday, stating it had stopped signing similar deals, and jointly agreed with the ACCC to admit liability and to jointly submit to court its agreement to pay a fine of $36 million (AUD $55 million).
Why It Matters
“Conduct that restricts competition is illegal in Australia because it usually means less choice, higher costs, or worse service for consumers,” said ACCC Chair Gina-Cass Gottlieb.
In a world where most people grab their phones and default to whatever search engine is pre-installed, the deals made with Telstra and Optus give Google an unfair head start. Such practices are capable of distorting the market and the basic right of choice.
A Pattern of Antitrust Trouble
Note that this is not Google’s first encounter with the AUCC. From 2011 to date, Google has faced numerous charges regarding its practices by the commission.
From 2011 to 2013, Google faced charges of misleading and deceptive conduct of online advertising. The case ended with the High Court granting Google’s appeal on February 6, 2013.
In 2020, the ACCC initiated a case against Google for allegedly misleading consumers about the collection and use of their personal data. The ACCC stated Google’s “location history” and “Web & App Activity” were deceptive.
The case ended in August 2022, with the Federal Court ordering Google to pay a penalty of AUD $60 million.
Google also has a track record of antitrust probes not restricted to the ACCC. In this year alone Google has received antitrust charges from the U.S. Department of Justice (DOJ) and the Competition Commission of India (CCI).
What’s Next? Court Approval & Enforcement
Although Google has cooperated with the ACCC to pay a fine of $35 million, it is still up to the final decision of the court if the fine and other orders are appropriate.
Pending that, Google Asia Pacific and its US parent company have signed a court-enforceable undertaking to remove certain pre-installation and default search engine restrictions from its contracts with Android phone manufacturers and Australian telcos.
The ACCC had previously received court-enforceable undertakings from Telstra and Optus in June 2024 and TPG in August 2024 to stop renewing any similar exclusivity arrangements with Google.
The Road Ahead
As the tech world continues to grow, many nations and organizations are no longer willing to let tech companies operate without accountability. New regulations like the Digital Markets Act (DMA) are being put in place, and many companies, especially the tech giants, have faced antitrust scrutiny.
“Today’s outcome, along with Telstra, Optus, and TPG’s undertakings, has 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,” said ACCC Chair Gina-Cass Gottlieb.
The $35 million fine serves as a warning to Google and demonstrates the seriousness of competition authorities in promoting fair competition. Stay tuned to see how this plays out with the court’s final decision.
