Google Asia Pacific has been ordered by the Federal Court to pay a $55 million penalty for anti-competitive conduct involving the default use of Google Search on Android phones.

According to the Australian Competition and Consumer Commission (ACCC), Google entered into agreements with Telstra and Optus between December 2019 and March 2021 that required the telcos to pre-install Google Search and exclude competing search engines.

In return, the telcos received a share of advertising revenue generated from user searches.

Google admitted to the conduct and worked with the ACCC on proposed penalty orders.

“This penalty should serve as a strong warning to businesses that anti-competitive conduct carries serious and costly consequences,” said ACCC deputy chair Mick Keogh.

“Removing competitors in a way that substantially lessens competition is unlawful,” he added.

In addition to the fine, Google and its parent company Google LLC have provided court-enforceable commitments to remove contractual restrictions on pre-installation and default search settings in agreements with Android manufacturers and telcos.

These undertakings build on commitments accepted last year from Telstra, Optus and TPG. Under those commitments, the telcos agreed not to renew or enter new agreements requiring exclusive pre-installation of Google Search.

They are permitted to configure search settings independently across devices and work with alternative search providers.

“Today’s outcome, combined with the undertakings from Google and the telcos, creates the potential for millions of Australians to have greater search choice in the future. Other search tools, including those enhanced by artificial intelligence, can now compete for pre-installation on Android phones,” he said.

Digital competition issues remain a priority for the ACCC’s enforcement and oversight.