Google has agreed to pay a US$36 million (AUS$55 million) penalty after admitting to striking anti-competitive agreements that ensured its search engine remained the default on Android smartphones sold by two of Australia’s largest telecommunications companies Reuters reported.

The Australian Competition and Consumer Commission (ACCC) announced that it launched proceedings in the Federal Court and, together with Google Asia Pacific, submitted the proposed fine for approval. The court will now determine whether the penalty and other orders are “appropriate.”

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

According to the watchdog, Google struck deals with Telstra and Optus between December 2019 and March 2021, guaranteeing its search engine was the only one pre-installed on Android devices sold by the telecom providers. In exchange, Telstra and Optus received a share of the advertising revenue generated from search traffic.

“Google has admitted in reaching those understandings with each of Telstra and Optus, it was likely to have had the effect of substantially lessening competition,” the ACCC stated.

While Google cooperated with the investigation, the company emphasized that such provisions had already been removed from its commercial agreements. “We are committed to providing Android device makers more flexibility to preload browsers and search apps,” a Google spokesperson said.

Last year, both Telstra and Optus entered court-enforceable undertakings not to strike similar exclusive pre-installation agreements in the future.

The case underscores the ACCC’s increasing scrutiny of Big Tech firms and their influence over Australia’s digital economy and online advertising market, as regulators worldwide intensify oversight of competition in the search engine and mobile technology sectors.