Federal Court orders Google Asia Pacific to pay penalties for exclusive pre-installation agreements with Telstra and Optus that locked out rival search engines.
Google locked to Optus and Telstra through exclusive search deals, chains now broken by court ruling.
Australia’s Federal Court ordered Google Asia Pacific to pay $55 million in penalties on December 2, 2025, for anti-competitive conduct involving exclusive search engine pre-installation agreements with telecommunications companies Telstra and Optus. The Australian Competition and Consumer Commission brought the proceedings after determining that arran…
Federal Court orders Google Asia Pacific to pay penalties for exclusive pre-installation agreements with Telstra and Optus that locked out rival search engines.
Google locked to Optus and Telstra through exclusive search deals, chains now broken by court ruling.
Australia’s Federal Court ordered Google Asia Pacific to pay $55 million in penalties on December 2, 2025, for anti-competitive conduct involving exclusive search engine pre-installation agreements with telecommunications companies Telstra and Optus. The Australian Competition and Consumer Commission brought the proceedings after determining that arrangements between December 2019 and March 2021 substantially lessened competition in the search market.
The understandings required Telstra and Optus to exclusively pre-install Google Search on Android mobile phones sold to consumers. Rival search engines were prohibited from these distribution channels. In exchange for the exclusive arrangements, both telecommunications companies received a share of advertising revenue that Google generated when consumers used Google Search on their Android devices.
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Google cooperated with the ACCC investigation and admitted engaging in conduct that had the likely effect of substantially lessening competition. The company made joint submissions with the regulator regarding appropriate penalties. “This penalty should send a strong message to all businesses that there are serious and costly consequences for engaging in anti-competitive conduct,” ACCC Deputy Chair Mick Keogh said. The regulator emphasized that market economies depend on businesses competing freely with each other, making it illegal to lock out competing businesses in ways that substantially lessen competition.
The $55 million penalty represents one component of broader enforcement actions addressing Google’s search distribution practices in Australia. On August 18, 2025, Google and the United States-based Google LLC provided the ACCC with a court-enforceable undertaking. This commitment requires removing certain pre-installation and default search engine restrictions from Google’s contracts with Android phone manufacturers and telecommunications companies operating in Australian markets.
Google’s undertaking supplements court-enforceable commitments that Telstra, Optus, and TPG provided to the ACCC during 2024. The regulator accepted these undertakings to resolve concerns about the telecommunications companies’ involvement in exclusive arrangements with Google. Under their commitments, the three carriers undertook not to renew or establish new arrangements requiring Google’s search services to be pre-installed and set as default search functions on an exclusive basis on Android devices they supply.
The telecommunications companies gained flexibility under the resolution framework. Telstra, Optus, and TPG can configure search services on individual devices rather than applying platform-wide restrictions. Device-by-device configuration allows settings that may not align with Google’s standard configurations. The carriers can also enter into pre-installation agreements with alternative search providers, creating potential distribution channels for Google’s competitors.
“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,” Keogh said. He noted that other search tools, including those enhanced by artificial intelligence, can now compete with Google for pre-installation on Android phones. The ACCC emphasized that search tools incorporating AI are rapidly changing how consumers search for information, making it critical that Google competitors gain meaningful exposure to Australian consumers.
Competition issues in the digital economy represent a current ACCC compliance and enforcement priority. The regulatory focus reflects broader scrutiny of digital platform market power across global jurisdictions. Google LLC, a wholly-owned subsidiary of Alphabet Inc., has signed numerous contractual arrangements to distribute Google apps including Google Search since at least 2017. These agreements include mobile application distribution agreements and revenue share agreements across multiple markets.
Google Asia Pacific serves as the contracting counterparty for mobile revenue share agreements throughout the Asia Pacific region, including Australia. This corporate structure placed the regional entity at the center of enforcement proceedings. The ACCC commenced Federal Court proceedings against Google Asia Pacific on August 18, 2025. Telstra, Optus, and TPG were not parties to the court proceedings, having previously resolved their involvement through the undertaking process.
The enforcement action builds on findings from the ACCC’s Digital Platforms Branch, which conducted a five-year inquiry into markets for digital platform services in Australia. The inquiry examined competitive impacts on businesses and consumers, including an update on general search services published in December 2024. The inquiry’s fifth report, released in November 2022, made recommendations to strengthen competition in the digital economy, level playing fields between technology companies and Australian businesses, and reduce consumer prices.
Specific recommendations addressed regulatory approaches to digital platform services. The ACCC proposed that the government introduce a framework for mandatory service-specific codes for Designated Digital Platforms. These codes would address competition issues including exclusive pre-installation and default agreements that hinder market competition. Treasury has consulted on proposed approaches to implement a new digital competition regime administered by the ACCC, though implementation timelines remain uncertain.
The Australian proceedings parallel antitrust enforcement against Google in United States courts, where Judge Amit Mehta ruled in August 2024 that Google illegally maintained monopolies in general search services and search text advertising markets. United States courts found that Google paid $26.3 billion in 2021 to ensure its search engine remained the default option on smartphones and browsers, maintaining approximately 90% of the overall online search market.
The convergence of enforcement actions across jurisdictions creates pressure on Google’s search distribution model. Remedies proceedings in United States courts have required Google to disclose advertising auction modifications and end certain exclusive distribution agreements, though courts rejected demands for Chrome browser divestiture. The Australian enforcement adds geographic scope to regulatory challenges facing Google’s search business structure.
For digital marketing professionals, the Australian resolution affects how search distribution operates on Android devices. The removal of exclusive pre-installation requirements creates theoretical opportunities for alternative search providers to reach Australian consumers through telecommunications channels. Whether competitors can effectively leverage this access depends on their ability to negotiate distribution agreements with carriers and their capacity to deliver search experiences that retain users beyond initial device configuration.
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The practical impact on search market dynamics remains uncertain. Default search settings exert powerful effects on user behavior, with most consumers never changing pre-configured search engines even when alternatives are available. Research presented in United States antitrust proceedings demonstrated that default placement provides enormous competitive advantages because usage patterns strongly favor pre-installed services.
Artificial intelligence integration in search services adds complexity to competitive dynamics. AI-enhanced search tools from companies including OpenAI, Anthropic, and Perplexity represent emerging alternatives to traditional search engines. The Australian enforcement creates distribution opportunities during a period when AI is transforming information retrieval methods, potentially amplifying the significance of access to consumer devices.
The telecommunications companies’ ability to configure search services on device-by-device bases provides flexibility that may benefit niche search providers. Carriers could differentiate device offerings by featuring privacy-focused search engines, AI-powered alternatives, or specialized search tools targeting specific consumer segments. Whether Telstra, Optus, and TPG pursue such differentiation strategies depends on commercial calculations about consumer demand for search alternatives and revenue opportunities from competing distribution agreements.
Google’s cooperation with ACCC enforcement contrasts with more adversarial approaches the company has adopted in other jurisdictions. The willingness to admit liability and propose penalty amounts enabled resolution without protracted litigation that might have exposed additional details about revenue sharing models and competitive strategies across platform markets. This cooperative stance may reflect strategic calculations about managing regulatory relationships across the Asia Pacific region.
The $55 million penalty amount reflects the scale of anti-competitive impact that the ACCC determined occurred during the 15-month period when exclusive arrangements operated. Penalty calculations in competition matters typically consider factors including the nature of the conduct, market effects, corporate revenue, deterrence requirements, and cooperation with investigations. Google’s admission of liability and joint submissions with the regulator likely influenced the final penalty determination.
Competition issues in digital platform services extend beyond search distribution to encompass advertising technology markets, where Google faces separate antitrust proceedings in United States courts. Judge Leonie Brinkema ruled in April 2025 that Google monopolized digital advertising technology markets, with remedies proceedings examining potential structural separations of Google’s advertising business components. The convergence of enforcement actions across search and advertising creates comprehensive regulatory pressure on Google’s core business operations.
The Australian enforcement represents a significant development in global efforts to address digital platform market power through competition law mechanisms. Whether the removal of exclusive pre-installation requirements produces meaningful competitive effects depends on the ability of alternative search providers to leverage new distribution opportunities and deliver experiences that persuade users to maintain non-Google search configurations over time.
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Timeline
- At least 2017: Google LLC begins signing contractual arrangements to distribute Google apps including Google Search across markets
- December 2019: Google Asia Pacific reaches understandings with Telstra and Optus requiring exclusive pre-installation of Google Search on Android devices
- March 2021: Platform-wide provision arrangements with Telstra and Optus conclude
- November 2022: ACCC publishes fifth report recommending regulatory regime for digital platform services
- 2024: Telstra, Optus, and TPG provide court-enforceable undertakings to ACCC resolving concerns about involvement in Google arrangements
- August 2024: Judge Amit Mehta rules Google illegally maintained monopolies in United States general search services and search text advertising markets
- August 18, 2025: ACCC commences Federal Court proceedings against Google Asia Pacific; Google and Google LLC provide court-enforceable undertaking removing pre-installation restrictions
- September 2, 2025: Judge Mehta imposes behavioral restrictions on Google’s search monopoly in United States proceedings
- December 2, 2025: Federal Court orders Google Asia Pacific to pay $55 million in penalties for anti-competitive conduct
- December 2024: ACCC publishes Digital Platform Services Inquiry update on general search services
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Summary
Who: Google Asia Pacific, the regional contracting entity for mobile revenue share agreements, engaged in anti-competitive conduct with Australian telecommunications companies Telstra and Optus. The Australian Competition and Consumer Commission brought Federal Court proceedings that resulted in penalty orders.
What: Google reached understandings with Telstra and Optus requiring exclusive pre-installation of Google Search on Android mobile phones sold to consumers. The arrangements prevented rival search engines from accessing these distribution channels. In exchange, the telecommunications companies received shares of advertising revenue generated from Google Search usage on Android devices.
When: The anti-competitive understandings operated between December 2019 and March 2021. The ACCC commenced Federal Court proceedings on August 18, 2025. The Federal Court ordered $55 million in penalties on December 2, 2025.
Where: The arrangements affected Android devices sold to consumers in Australia through Telstra and Optus distribution channels. The enforcement proceedings occurred in Federal Court. Google Asia Pacific serves as the contracting counterparty for mobile revenue share agreements throughout the Asia Pacific region including Australia.
Why: The arrangements had the likely effect of substantially lessening competition in search markets by preventing rival search engines from gaining distribution access through major telecommunications channels. The ACCC emphasized that locking out competing businesses in ways that substantially lessen competition violates competition law. The resolution aims to create potential for millions of Australians to have greater search choice and allow AI-enhanced search tools to compete with Google for pre-installation on Android phones.