In a ruling that reverberates through Australia’s digital economy, the Federal Court has ordered Google Asia Pacific to hand over $55 million in penalties after admitting it struck deals that shut out rival search engines on millions of Android devices.
The Court found that between December 2019 and March 2021, Google reached behind-the-scenes understandings with Telstra and Optus, ensuring that only Google Search would come pre-installed on the Android phones sold by the nation’s two largest telcos.
In exchange, Telstra and Optus pocketed a slice of the advertising revenue generated every time consumers used Google’s search bar.
The ACCC, which brought the case, argued the arrangement effectively smothered fair competition before rival search providers ever had a chance to reach consumers’ screens.
Google ultimately conceded the conduct had the likely effect of substantially lessening competition and worked with the regulator on jointly proposed penalties—an unusual alignment in a case that underscores the increasing scrutiny on global tech giants’ market power.
The judgment marks one of the most significant Australian penalties imposed over digital marketplace behaviour, sending a clear signal: in the battle for default status, even the world’s biggest players must play fair.
“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.
“Our market economy is predicated on businesses competing freely with each other, which is why locking out competing businesses in a way that substantially lessens competition is illegal.”
Beyond the $55 million in court penalties, Google has taken another step toward reshaping its Australian operations.
On 18 August 2025, Google and its US parent, Google LLC, gave the ACCC a court-enforceable undertaking, pledging to remove certain pre-installation and default search engine restrictions from contracts with Android phone manufacturers and telcos.
This move builds on similar undertakings provided last year by Telstra, Optus, and TPG, which resolved regulatory concerns about their role in Google’s exclusive search arrangements.
Under those commitments, the three telcos agreed not to renew—or enter new—contracts requiring Google Search to be pre-installed and set as the default on Android devices they supply.
The undertakings give telcos greater freedom: they can now configure search services on a device-by-device basis, potentially diverging from Google’s default settings, and are free to negotiate pre-installation agreements with other search providers.
Collectively, these measures mark a significant shift in how search engines compete for Australians’ screens, opening the door to more consumer choice in the mobile search market.
“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,” Mr Keogh said.
“Other search tools, including those enhanced by artificial intelligence, can now compete with Google for pre-installation on Android phones,”
“Search tools, including those that incorporate AI, are rapidly changing how we search for information, and it’s critical that competitors to Google can gain meaningful exposure to Australian consumers.” he said.
The Federal Court’s decision, coupled with the enforceable undertakings, signals a pivotal moment in Australia’s digital landscape.
It reinforces that even global tech giants must adhere to competition laws and underscores the ACCC’s resolve to protect consumer choice.
As the market adjusts to these changes, Australians can expect a more open and competitive mobile search environment—where the power to choose is finally returned to the user.
