Google will pay a $55 million fine for getting Australia’s two biggest telcos to pre-install its own search engine on Android phones.

The massive tech company had contracts with Telstra and Optus, ensuring that only Google Search, and no other search engines, would be installed on Android devices sold to customers between December 2019 and March 2021.

Google then provided the telcos with a share of the ad revenue generated from those customers using its search engine on their phones.

The Australian Competition and Consumer Commission (ACCC) has today settled with Google Asia Pacific regarding these contracts, stating that the actions were illegal and stifled competition.

Google has acknowledged this conduct and agreed to pay a $55 million fine in concert with the ACCC, although the Federal Court will decide on the final penalty.

“Restrictive practices that curb competition are illegal in Australia because they typically lead to fewer choices, higher prices, or poorer service for consumers,” said ACCC chair Gina-Cass Gottlieb.

“The resolution today offers a chance for millions of Australians to enjoy broader search options in the future and gives competing search engines a better chance to reach Australian consumers.”

“Importantly, these changes come at a time when AI search tools are revolutionising how we search for information, creating new competition.”

Google has also agreed to lift “certain pre-installation and default search engine restrictions” from its agreements with telecommunications companies and Android device manufacturers.

“We’re pleased to resolve the ACCC’s concerns, which involved provisions that haven’t been in our commercial agreements for some time,” a Google spokesperson said.

“We are committed to providing Android device makers more flexibility to preload browsers and search apps, while preserving the offerings and features that help them innovate, compete with Apple, and keep costs low.”

That follows similar undertakings from Telstra, Optus and TPG last year to not exclusively pre-install Google’s search engine on Android phones sold by the three telcos.