Google, the internet behemoth, is set to pay a hefty $55 million fine after entering into anti-competitive agreements with Australia’s two leading telecommunications companies. These deals prevented the installation of rival search engines on smartphones.

Today, Federal Court Justice Mark Moshinsky endorsed the fine suggested by the Australian Competition and Consumer Commission, emphasizing that the penalty should be substantial enough to discourage future anti-competitive practices.

This penalty ranks among the largest ever levied against the US tech giant, trailing only a $60 million fine imposed by the court in 2022 for covertly gathering location data from certain Android phone users.

The competition authority initiated legal proceedings against Google Asia Pacific in August, targeting deals with Telstra and Optus that spanned from December 2019 to March 2021.

These agreements obligated the telecom companies to pre-install Google’s Search app on Android phones, designate it as the default search tool, and prohibit the pre-installation of rival search services.

In exchange, the telecommunications companies receive a share of advertising revenue from Google search results shown on the devices. 

Google had admitted the deals and agreed with the commission that they were “likely to have the effect of hindering competition within the market in Australia,” Moshinsky said in his findings. 

The $55 million penalty proposed by the commission and agreed to by Google was within the appropriate range for the law, he said, and should discourage similar anti-competitive acts. 

“The cases emphasise that the primary if not sole purpose of civil penalties is deterrence of further contravening conduct of a like kind,” Moshinsky said. 

“I’m satisfied that the proposed total penalty is a sufficiently significant figure to achieve the object of deterrence, both specific and general.”

Telstra, Optus and TPG have signed court-enforceable undertakings not to make similar anti-competitive arrangements with the tech company in future, and the commission’s lawyer told the court it would not seek further action against the telcos. 

Stamping out anti-competitive behaviour on digital platforms was vital to ensuring consumers could access the best technology for their needs, commission deputy chair Mick Keogh said, particularly as more advanced, artificially intelligent options emerged. 

“This penalty should send a strong message to all businesses that there are serious and costly consequences for engaging in anti-competitive conduct,” he said.

“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.”