Search hit: court orders massive fine against Google
Internet giant Google will have to pay a $55 million fine for signing anti-competitive agreements with the country’s two largest telecommunications companies that ban rival search engines from being pre-installed on smartphones.
Federal Court Judge Mark Moshinsky approved the penalty recommended by the Australian Competition and Consumer Commission on Tuesday, finding it should be significant enough to deter future anti-competitive behavior.
The fine is one of the largest ever imposed on a US tech giant, second only to the $60 million fine the court imposed in 2022 for secretly collecting location data from some Android phone users.
The competition watchdog took legal action against Google Asia Pacific in August over deals with Telstra and Optus that ran from December 2019 to March 2021.
The agreements required telcos to pre-install Google’s Search app on Android smartphones, setting it as the default search option on the devices, and prohibited pre-installing rival search services.
In return, telecommunications companies receive a share of the advertising revenue from Google search results displayed on devices.
In his findings, Judge Moshinsky said Google had agreed to the agreements and agreed with the commission that they “could have the effect of inhibiting competition in the Australian market”.
He said the $55 million penalty recommended by the commission and accepted by Google was within the appropriate range for the law and should deter similar anti-competitive actions.
“The cases highlight that the primary, if not the sole, purpose of fines is to deter further contravening behavior of the same kind,” Judge Moshinsky said. he said.
“I am satisfied that the total penalty proposed is a sufficiently significant figure to achieve both the specific and general aim of deterrence.”
Telstra, Optus and TPG have signed court-enforceable undertakings not to enter into similar anti-competitive arrangements with the tech company in the future, and the commission’s lawyer told the court no further action would be brought against the telcos.
Commission deputy chairman Mick Keogh said eliminating anti-competitive behavior on digital platforms was vital to ensuring consumers had access to the best technology for their needs, especially with the emergence of more advanced, artificially intelligent options.
“This fine should send a strong message to all businesses that engaging in anti-competitive behavior has serious and costly consequences,” he said.
“Search tools, including artificial intelligence, are rapidly changing the way we seek information, and it is critical that Google’s competitors are able to reach Australian consumers in a meaningful way.”
The court ruling comes nine months after the commission concluded its five-year investigation into Digital Platform Services, which recommended mandatory codes of practice to boost competition and provide greater protection against unfair trading practices.
Google dominates web search queries in Australia; Statcounter estimates that Google provided 91 percent of search results for the year through November, followed by Bing (6.2 percent) and Yahoo (1.35 percent).
