Google will pay a $55 million fine for getting Australia’s two biggest telcos to pre-install its own search engine on Android phones.

The multibillion-dollar tech giant had agreements in place with Telstra and Optus for the two phone providers to only install Google search – and not any other search engines – on Android devices sold to customers between December 2019 and March 2021.

Google then provided the telcos with a share of the ad revenue generated from those customers using its search engine on their phones.

The Australian Competition and Consumer Commission (ACCC) today reached a settlement with Google Asia Pacific over the agreements, with the consumer watchdog saying it was illegal, anti-competitive behaviour.

Google has admitted to the behaviour and has agreed with the ACCC to pay a $55 million fine, although it is up to the Federal Court to determine the final penalty.

“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 (has) 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.

“Importantly, these changes come at a time when AI search tools are revolutionising how we search for information, creating new competition.”

Google has also agreed to remove “certain pre-installation and default search engine restrictions” from its contracts with telcos and Android manufacturers.

“We’re pleased to resolve the ACCC’s concerns, which involved provisions that haven’t been in our commercial agreements for some time,” a Google spokesperson said.

“We are committed to providing Android device makers more flexibility to preload browsers and search apps, while preserving the offerings and features that help them innovate, compete with Apple, and keep costs low.”

That follows similar undertakings from Telstra, Optus and TPG last year to not exclusively pre-install Google’s search engine on Android phones sold by the three telcos.