Federal Court Orders Penalty After ACCC Action Targets Exclusive Deals with Telstra and Optus

Google Asia Pacific has been ordered by the Federal Court to pay a penalty of $55 million for engaging in anti-competitive conduct related to the pre-installation of Google Search on Android mobile phones. The proceedings were initiated by the Australian Competition and Consumer Commission (ACCC).

The anti-competitive conduct stemmed from understandings Google reached with Telstra and Optus, which were in place between December 2019 and March 2021. These arrangements required the telecommunications companies to only pre-install Google Search on the Android phones they sold to consumers, effectively locking out other search engines. In exchange for this exclusivity, Telstra and Optus received a portion of the revenue generated by Google from ads displayed when consumers used Google Search on the devices.

Google admitted it had engaged in anti-competitive conduct that had the likely effect of substantially lessening competition, and the company cooperated with the ACCC by making joint submissions regarding penalties.

ACCC Deputy Chair Mick Keogh stated that the penalty is intended to serve as a powerful warning to all businesses. “This penalty should send a strong message to all businesses that there are serious and costly consequences for engaging in anti-competitive conduct,” Keogh said. He emphasized that Australia’s market economy depends on businesses competing freely, which is why “locking out competing businesses in a way that substantially lessens competition is illegal”.

Undertakings Restore Search Choice

In addition to the financial penalty, steps have been taken to remove the restrictive agreements. On August 18, 2025, Google and the US-based Google LLC provided the ACCC with a court-enforceable undertaking. In this commitment, they pledged to remove certain pre-installation and default search engine restrictions from Google’s contracts with both Android phone manufacturers and telcos.

This commitment follows court-enforceable undertakings previously provided by Telstra, Optus, and TPG, which the ACCC accepted to resolve concerns about their involvement in the agreements with Google. The three telcos have committed not to renew or form new exclusive arrangements with Google that require its search services to be pre-installed and set as the default search function on Android devices they supply.

Crucially, the telcos now have the freedom to configure search services on a device-by-device basis, potentially differing from Google’s standard settings, and they are able to enter into pre-installation agreements with other search providers.

Keogh noted that this combined outcome “creates the potential for millions of Australians to have greater search choice in the future”. He added that competitors, including search tools enhanced by artificial intelligence, can now compete with Google for pre-installation exposure on Android phones. Keogh stressed that as search tools incorporating AI rapidly change how information is found, it is vital that Google’s competitors can gain meaningful exposure to Australian consumers.