Google To Pay $36 Million Fine For Anticompetitive Deals In Australia

Google parent company Alphabet (GOOGL) has agreed to pay a $36 million U.S. fine for signing anticompetitive deals with Australia’s two largest telecommunication companies.

The deals struck by Google banned the installation of competing search engines on some smartphones, running afoul of Australia’s competition watchdog.

The Australian Competition and Consumer Commission said in a statement that it had commenced legal proceedings against Google.

The courts in Australia will decide whether the $36 million U.S. fine is appropriate.

Under the agreements, which were in place for 15 months starting in March 2021, telcos Telstra and Optus only pre-installed Google’s search engine on the phones they sold to consumers.

Other search engines were excluded by the Australian telecommunications companies. In return, the telcos received a share of the advertising revenue Google generated.

Google has acknowledged that the agreements were likely to “substantially lessen competition,” the Australian commission said in its statement.

Google has signed a court order that requires it to remove certain pre-installation and default search engine restrictions from its contracts with telecommunication companies in Australia.

Alphabet said in its own statement: “We’re pleased to resolve the ACCC’s concerns, which involved provisions that haven’t been in our commercial agreements for some time.”

Telstra and Optus agreed to court orders that prevent them from renewing or making similar deals with Google to limit search options in the future.

GOOGL stock has risen 8% this year to trade at $203.90 U.S. per share.