No more anti-competitive Google deals, Telstra, Optus vow

Google’s search service was installed as the default service on Android devices they supplied to customers in return for a share in its advertising revenue.

The Australian Competition & Consumer Commission’s ongoing investigation into Google’s search services in Australia led to it discovering agreements the tech group entered into with Telstra and Optus. Picture: AFP

Tech giant Google will likely face increased competition for search services on Android devices following undertakings by telco giants Telstra and Optus to the competition regulator.

The Australian Competition & Consumer Commission’s ongoing investigation into Google’s search services in Australia led to it discovering agreements the tech group entered into with Telstra and Optus.

It meant Google’s search service was installed as the default service on Android devices it supplied to customers in return for a share in its advertising ­revenue.

Google, which developed the Android operating system, had the agreements since at least 2017. They limited the ability for rival search engines to be pre-installed and promoted on Android devices.

The agreements expired on June 30 and both telcos have told the ACCC they will not renew or enter any new similar arrangements with Google.

“The undertakings from Telstra and Optus resolve the ACCC’s concerns in relation to their involvement in the alleged anticompetitive conduct,” the regulator said in a statement on Tuesday.

“We are continuing our investigation into Google’s conduct in entering into such agreements more broadly, as we consider this raises potential competition concerns. Accordingly, no further comment about the investigation will be made at this time,” the ACCC added.

The competition regulator found there are strong consumer biases towards default settings.

On mobile devices, Google Search’s market share in Australia has remained around 98 per cent from September 2021 to February 2024, with other search engines, including Microsoft’s Bing, having only a small presence.

The ACCC will submit its ninth Digital Platform Services Inquiry interim report in September and its final report in March 2025.

The increased scrutiny comes at a time when artificial intelligence is set to affect the way search engines perform.

AI-powered search engines and tools can scour the internet and providing answers to queries that aren’t influenced by the same advertising constraints and requirements as older search engines, including Google’s.

Social media platforms are also increasingly being used as a method of searching or finding visual results to queries.

Platforms including Chinese-owned TikTok are increasing competition against more traditional search engines and platforms like YouTube, where answers to queries are often cut into short, attention-grabbing videos infused with marketing strategies, flashing lights and popular music.

This isn’t the first time the watchdog has gone after search engines, with the ACCC launching an inquiry in September 2021.

At that time, just over 12 months before ChatGPT was launched publicly, the ACCC took issue with Google’s search engine being pre-installed on devices.

The following year the ACCC recommended new laws to promote more choice for consumers and lower barriers for potential competitors.

The ACCC has also taken aim at “bundling”, where a business requires a service be sold as a package and “self-preferencing”, which refers to giving preferential treatment to its own products.

An Optus spokesperson said the telco acknowledged the ACCC’s concerns regarding various preferential terms set out in its agreement with Google [and in agreements between Google and other mobile network operators].

“In the case of Optus, this agreement covered the pre-installation of search engine and assistant services on android devices,” the spokesperson said. “Optus’ agreement with Google expired on 30 June 2024 and Optus has offered the ACCC a three-year enforceable undertaking that it will not extend or renew this arrangement or enter into a new agreement containing the same or similar preferential terms.”