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The ����ԭ�� has accepted undertakings from Telstra and Optus as part of the ����ԭ��’s ongoing competition investigation into Google’s search services in Australia.

During the investigation into Google’s conduct, the ����ԭ�� became aware of agreements that Google had initiated and entered into with Telstra and Optus, which meant Google’s search services were pre-installed as the default search service on Android devices supplied by these companies.

“We are grateful for the cooperation of Telstra and Optus in responding to the ����ԭ��’s competition concerns. The undertakings will allow alternative search engines to be able to compete to be a default search engine on the Android devices these companies supply,” ����ԭ�� Commissioner Liza Carver said.

Google developed the Android operating system, and Google’s agreements with Telstra and Optus, in place since at least 2017, limited the ability for rival search engines to be pre-installed and promoted on Android devices, in return for a share of Google’s advertising revenue. These agreements expired on 30 June 2024.

Telstra and Optus have cooperated fully with the ����ԭ��’s investigation. They have each undertaken that, after 30 June 2024, they will not renew or enter any new arrangements with Google that require its search services to be pre-installed and set as the default search function on an exclusive basis on devices they supply.

The undertakings from Telstra and Optus resolve the ����ԭ��’s concerns in relation to their involvement in the alleged anticompetitive conduct.

“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,” Ms Carver said.

“Practices such as entering into agreements to ensure exclusivity can limit consumer choice or deter innovation. Digital platforms with significant market power should be aware of their obligations under Australia’s competition laws.”

“Globally, a range of measures are underway to protect and boost competition in the digital economy. In our view, these undertakings from Telstra and Optus are an important step in providing Australian consumers with more choice about the digital platforms and services they use, and encouraging more competition in these markets.”

“Reform to Australia’s competition and consumer laws, particularly to create targeted service specific mandatory codes of conduct for certain digital platforms to prevent anti‑competitive conduct, remains critically important to address the influence digital platforms have across the economy,” Ms Carver said.

Copies of the undertakings are available at: Telstra Limited and Telstra Group Limited and Optus Mobile Pty Ltd and Singtel Optus Pty Ltd

Background

In Australia, mobile devices represent the largest and fastest growing distribution channel for general search services, with 95 per cent of Australian adults having used a mobile phone to access the internet in 2023[1]. Securing preinstallation and default rights to devices distributed in Australia ‘out of the box’ is a key distribution channel for a provider of a search service.

The ����ԭ��’s ongoing competition  investigation into Google’s search services in Australia arose from the ����ԭ��’s consideration of competition and consumer issues in its Digital Platform Services Inquiry (DPSI). The third interim report of the Inquiry found that Google’s search engine being pre-installed as a default search service on devices was contributing to it being the dominant search engine in Australia. The ����ԭ�� found there are strong consumer biases towards default settings. The ����ԭ�� will submit its DPSI 9^th interim report in September 2024 and its final report in March 2025.

In its fifth interim report of the DPSI, submitted in September 2022, the ����ԭ�� recommended a range of new measures to address harms from digital platforms to Australian consumers, small businesses and competition. The report has also proposed mandatory codes of conduct for certain platforms and services to protect and promote competition.

On 8 December 2023, the Government provided in-principle support for all recommendations in the fifth interim report of the ����ԭ��’s Digital Platform Services Inquiry, which focused on regulatory reform. The United Kingdom, Germany, Japan and the European Union have already announced or implemented significant new competition and consumer regulations for digital platforms.

On mobile devices, Google Search’s market share in Australia has remained consistently around 98 per cent from September 2021 to February 2024, with other search engines, including Microsoft’s Bing, only having a small presence[2].