Google admits to anti-competitive phone search installations

Google has admitted to anti-competitive behaviour in striking deals with Telstra and Optus to only install Google Search on new Android phones.

The Australian Competition and Consumer Comission (ACCC) is taking Google to the Federal Court, with Google admitting fault and agreeing is should pay a penalty of $55 million.

According to the ACCC, the essence of the wrongdoing is that Google struck deals with Telstra and Optus — between December 2019 and March 2021 — to exclusively pre-install Google Search on the phones. Google then paid the telcos a cut of advertising revenue generated from search on those phones.

Telstra, Optus and TPG have already agreed with the ACCC to not enter into new exclusive search deals with Google. Those court-enforceable deals were struck late last year.

Now Google has also agreed to pay the fine and not strike exclusive deals. In a release to Mumbrella, Google referred to the deals as “ACCC’s concerns” and to the fact they happened several years ago.

“We’re pleased to resolve the ACCC’s concerns, which involved provisions that haven’t been in our commercial agreements for some time. We are committed to providing Android device makers more flexibility to preload browsers and search apps, while preserving the offerings and features that help them innovate, compete with Apple, and keep costs low.”

ACCC Chair Gina-Cass Gottlieb was less sanguine in her written comments.

“Conduct that restricts competition is illegal in Australia because it usually means less choice, higher costs or worse service for consumers,” she 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.”

While these issues concern Android phones, one of the bigger potential anticompetive issues for Google involves search default deals struck with Apple. In the US, it is facing multi-billion dollar penalties having been found guilty of anticompetive behaviour for payments of over $25 billion annually to the maker of the iPhone.