Google, one of the world’s tech giants, has found itself at the center of a significant regulatory storm in Australia. On August 18, 2025, the company agreed to pay a hefty fine of Aus$55 million (about US$36 million) after the Australian Competition and Consumer Commission (ACCC) determined that Google had engaged in anticompetitive practices with two of the country’s largest telecommunications companies, Telstra and Optus. The penalty, which is now awaiting Federal Court approval, marks one of the most high-profile antitrust actions in Australia’s recent history and highlights growing scrutiny of Big Tech’s influence over digital markets worldwide.
At the heart of the ACCC’s case was a series of agreements that ran from December 2019 to March 2021. During this period, Google struck deals with Telstra and Optus—Australia’s leading telecoms firms—to ensure that only Google’s search engine would be pre-installed on Android mobile phones sold to consumers. In exchange for this exclusivity, Telstra and Optus received a share of the advertising revenue generated when users searched the web using Google’s platform on their devices, according to the ACCC and as reported by AFP and other outlets.
This arrangement, regulators argued, effectively shut out rival search engines from gaining a foothold on millions of Australian smartphones. The ACCC emphasized that such conduct is illegal in Australia because it can lead to less choice, higher costs, and worse service for consumers. Gina Cass-Gottlieb, the ACCC’s chair, didn’t mince words: “Conduct that restricts competition is illegal in Australia because it usually means less choice, higher costs or worse service for consumers,” she said in a statement released Monday.
Google did not contest the facts. The company cooperated with the ACCC’s investigation and admitted that its deals with Telstra and Optus were likely to have had the effect of “substantially lessening competition.” In a joint submission to the Federal Court, Google Asia Pacific agreed to pay the penalty and acknowledged the impact of its actions. A Google spokesperson commented, “We are committed to providing Android device makers more flexibility to preload browsers and search apps.” The company also noted that the controversial provisions have not been a part of its commercial agreements for some time.
The financial penalty is only part of the story. As part of the resolution, Google signed a court-enforceable undertaking that commits it to removing certain pre-installation and default search engine restrictions from its contracts with Android phone manufacturers and telecommunications companies. This means that, moving forward, device makers and telecoms will have greater freedom to offer alternative search engines to consumers, potentially opening the door to more competition in Australia’s lucrative search market.
Telstra and Optus, for their part, entered into court-enforceable agreements last year not to make new deals to pre-install Google Search as the default on Android devices. This step, according to the ACCC, is meant to ensure that similar anticompetitive arrangements do not arise in the future.
The timing of this regulatory action is noteworthy. As Cass-Gottlieb pointed out, these changes come at a moment when artificial intelligence-powered search tools are rapidly transforming how people access information online, creating new opportunities—and challenges—for competition. “These changes come at a time when AI search tools are revolutionizing how people search for information, creating new competition,” she observed, as cited by Computerworld and other sources.
For Google, the fine and the accompanying undertakings are the latest in a string of legal setbacks in Australia. Just recently, a court sided with Epic Games in a high-profile case accusing Google and Apple of blocking rival app stores—a move that could have far-reaching implications for how digital platforms operate in the country. Additionally, Google’s YouTube platform was included in an Australian ban on social media access for users under 16, further signaling the country’s willingness to take on tech giants in defense of consumer interests.
Despite these challenges, Google’s broader business prospects remain strong, at least in the eyes of Wall Street. Analysts maintain a “Strong Buy” consensus rating on Alphabet (Google’s parent company) stock, projecting a 6.5% upside potential. That said, the company’s recent troubles in Australia are a reminder that regulatory risks are real—and growing—for global tech firms.
Australia’s action against Google is also part of a wider global push to rein in Big Tech’s market power. The European Union, for example, has imposed multi-billion-dollar fines on Google for similar competition law breaches, and courts in other jurisdictions are increasingly willing to scrutinize the company’s business practices. As noted by ALM Global, the Netherlands has become a hotspot for follow-on competition damages claims and class action lawsuits against major tech companies, including Google.
The specifics of the Australian case are instructive. The ACCC’s investigation revealed that by paying Telstra and Optus to pre-install Google Search and exclude rivals, Google was able to maintain its dominant position in the search market. The revenue-sharing deals provided a financial incentive for the telecoms to comply, at the expense of consumer choice and potential innovation from competing search providers.
Google’s willingness to admit liability and cooperate with regulators may reflect a broader shift in strategy as governments around the world ramp up antitrust enforcement. By settling with the ACCC and agreeing to change its contracts, Google may be hoping to avoid even harsher penalties or further litigation down the road. Still, the case sets a precedent that could influence how other countries approach similar issues in the digital economy.
For Australian consumers, the outcome of the case could mean more options when choosing a search engine on their mobile devices in the future. Whether this leads to meaningful competition remains to be seen, especially given Google’s entrenched market dominance and the challenges rivals face in breaking through. But the ACCC’s intervention signals that regulators are prepared to act when they believe consumer interests are at stake.
As the Federal Court prepares to decide whether the agreed penalty and orders are “appropriate,” all eyes will be on the final outcome. For now, the case stands as a milestone in Australia’s ongoing efforts to ensure fair competition in digital markets—and a warning to tech giants everywhere that the era of unchecked dominance may be coming to an end.
