Google Faces $36 Million Penalty in Australia Over Telco Search Deals

In a significant move to promote fair competition, tech giant Google has consented to a hefty fine of approximately $36 million in Australia. This comes after regulators uncovered arrangements that limited consumer choices in search engines on mobile devices.

The Australian Competition and Consumer Commission (ACCC) investigated Google's partnerships with the nation's top telecommunications providers, Telstra and Optus. Between late 2019 and early 2021, Google reportedly compensated these companies to ensure its search app was pre-installed on Android smartphones. In return, the telcos received a share of advertising earnings from searches conducted on those devices.

These exclusive deals effectively sidelined competing search providers, reducing options for millions of Australian users. Google has acknowledged that such practices significantly affected market rivalry and has since discontinued similar agreements worldwide.

ACCC Chair Gina Cass-Gottlieb highlighted the positive impact, stating that this resolution paves the way for broader search alternatives and helps emerging competitors gain traction among local consumers.

The fine, amounting to A$55 million, has been jointly proposed by Google and the ACCC to the Federal Court for approval. This collaborative approach has spared both parties from prolonged legal battles, allowing for a quicker outcome.

A representative from Google expressed satisfaction in addressing the concerns, noting that the involved clauses are no longer part of their contracts. The company emphasized its dedication to giving Android manufacturers greater leeway in adding various browsers and search tools, fostering innovation and keeping prices competitive against rivals like Apple.

This penalty adds to Google's recent challenges down under. Just last week, a court largely sided against the company in a case filed by Epic Games, criticizing restrictions on alternative app stores. Additionally, YouTube now falls under a nationwide ban preventing access for users under 16, aligning with stricter social media regulations.

Telstra and Optus, the latter owned by Singapore Telecommunications, have cooperated fully with the investigation. Both have committed to avoiding future pre-installation pacts with Google starting from 2024.

This case underscores the growing scrutiny on big tech's influence over digital ecosystems, encouraging more equitable practices that benefit users and smaller players alike. As Australia leads in holding tech firms accountable, it could inspire similar actions globally.