Google fesses up to anti-competitive behavior in Australia, will pay up

Google has admitted that it had made a revenue-sharing deal with Australia’s largest telecommunication companies and agreed to pay a $36 million penalty from the competition watchdog.

The issue is that the deal was anti-competitive and aimed at reducing search competition, according to the Australian Competition & Consumer Commission (ACCC).

The agreement, in place between December 2019 and March 2021, required Telstra and Optus, the country’s telecommunication firms, to only pre-install Google Search on Android phones they sold to consumers, and not other search engines.

In return, Telstra and Optus received a share of the revenue that Google generated from ads displayed to consumers when they used Google Search on their Android phones.

All that amounts to engaging in anticompetitive business practices. Importantly, Google has actually admitted that this relationship with Telstra and Optus substantially lessened competition.

The tech giant has agreed to pay a $36 million fine, although the court will still have to decide whether the size of the penalty is appropriate.

According to the ACCC, Google has also committed to removing certain pre-installation and default search engine restrictions from its contracts with Android phone manufacturers and telcos.

“Conduct that restricts competition is illegal in Australia because it usually means less choice, higher costs, or worse service for consumers,” ACCC Chair Gina-Cass Gottlieb said.

“Today’s outcome, along with Telstra, Optus and TPG’s (that’s another Australian telco) 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.”

Together with Apple, Google lost another important case in the Australian Federal Court last week. According to the judge, the tech companies have violated Australia’s Competition Act by implementing app store policies that restrict competition.

The trial concerned Apple’s and Google’s app store policies, which take a large cut from all app purchases – up to 30 percent. The case also included allegations of creating and maintaining an illegal monopoly over their app stores.

The tech giant has agreed to pay a $36 million fine, although the court will still have to decide whether the size of the penalty is appropriate.

Google might have relented in order to win some favor from Australia’s government on another front.

At the end of July, Prime Minister Anthony Albanese announced that YouTube (owned by Google) will be among the social media platforms that must verify that account holders are at least 16-years-old.

The goal of the ban is to combat both the mental and physical effects that social media platforms have been demonstrated to cause in young children, such as social isolation, sleep interference, addictive behaviors, and low life satisfaction.