Australian Competition and Consumer Commission v Google Asia Pacific Pte Ltd

In Australian Competition and Consumer Commission v Google Asia Pacific Pte Ltd [2025] FCA 1554, the Federal Court made declarations and imposed a total penalty of $55 million after Google admitted contraventions of section 45(1)(a) of the Competition and Consumer Act 2010 (Cth). The case concerned understandings reached with Telstra and Optus in about December 2019 that kept existing revenue-share terms in place while new agreements were still being negotiated.

The key issue was that the continued terms included Platform-wide Provisions affecting Android devices supplied by those carriers. Those provisions required all search access points on those devices to use Google Search out-of-the-box and restricted the carriers from implementing, preloading, installing, presenting, introducing or suggesting substantially similar rival general search engine services. The Court accepted that each understanding was likely to make it more difficult for rival general search engine services to obtain distribution in Australia during the relevant period and thereby hinder competition.

The commercial setting matters. The case sat in the supply of general search engine services in Australia. The reasons explain that when users acquire a device, there are several search access points available out-of-the-box. A general search engine service is typically pre-set as the default for each search access point. If the user does not change those settings, their search queries are generally directed to the pre-set default service. The reasons also record agreed facts that many users do not typically change defaults or use other methods to access an alternative service unless they find the pre-set default less attractive.

That is why default rights and preinstallation rights matter commercially. The Court recorded agreed facts that an efficient and effective channel for a search provider to distribute its service is to arrange with original equipment manufacturers, browser providers and mobile network operators for its service to be set as the default for one or more search access points and or for further means of access, such as an app, to be preinstalled on the device. This also benefits end users because the service is ready to go out-of-the-box.

Telstra and Optus were especially important channels because they were the two largest mobile network operators in Australia. At the relevant time, Telstra had around 19 million retail mobile subscribers in 2020 and Optus had over 10 million mobile customers as at December 2019. Google Search was also the largest general search engine service in Australia. The reasons record Statcounter estimates that, during the period from December 2019 until the end of March 2021, over 90% of all general search queries conducted on a general search engine service in Australia were conducted on Google Search, and over 95% of general search queries on mobile devices were conducted on Google Search.

Google had revenue-share agreements with Telstra and Optus. Those agreements included Platform-wide Provisions. As described in the Court’s declarations, those provisions required that all search access points on any Android mobile device supplied by Telstra or Optus in Australia be configured to use Google Search out-of-the-box. They also prevented the carrier from implementing, preloading or otherwise installing out-of-the-box, or presenting, introducing or suggesting to an end user, any general search engine service substantially similar to Google Search.

By around June 2019, Google had approved a new agreement framework, referred to in the reasons as RSA 3.0. That framework contemplated new agreements that did not include the Platform-wide Provisions. Google intended those new agreements to replace the Optus agreement due to expire on 31 December 2019 and the Telstra agreement due to expire on 31 January 2020. Presentations about the key commercial terms of the proposed new agreements were made to Telstra on or around 17 October 2019 and to Optus on or around 28 October 2019.

But the new agreements were not ready in time. During October to December 2019, indications were made on Google’s behalf that Google would agree to extend the existing agreements and that Google and each carrier would continue to be bound by the existing terms, including the Platform-wide Provisions, while the necessary steps for the new agreements were completed. By about December 2019, Google had arrived at understandings with each of Telstra and Optus on that basis.

Those understandings were not just momentary administrative arrangements. The reasons say that, at the time they were reached, the term of each understanding was uncertain, but each was likely to continue for at least many months. In fact, they continued until March 2021. There was no cessation or interruption to the revenue-share payments made by Google to each carrier during that period. Google then entered into a new agreement with Optus on 6 April 2021 and with Telstra on 31 May 2021. Those new agreements did not contain provisions equivalent to the Platform-wide Provisions, although Telstra and Optus continued in practice to preinstall Google Search and set it as the default on search access points out-of-the-box.

That sequence is central to the case. The issue was not that Google later remained the default in practice. The issue was that the December 2019 understandings kept earlier restrictive terms alive during the interim period.

The legal question was whether Google contravened section 45(1)(a) of the Competition and Consumer Act by arriving at understandings with Telstra and Optus that contained a provision likely to have the effect of substantially lessening competition. The Court’s declarations describe the relevant provision as the continuation of the existing terms of the Google Mobile Revenue Share Agreements, including the Platform-wide Provisions, until negotiations for further revenue-sharing agreements were concluded.

The competition issue was framed around distribution. The Court accepted agreed facts that each understanding was likely to have the effect of making it more difficult to obtain the distribution of general search engine services in Australia during the period from December 2019 until the end of March 2021 and thereby was likely to hinder competition in an Australia-wide market in which general search engine services were supplied.

This is important because the case was not decided simply by asking whether users could theoretically switch search engines. The reasons record that users can use proactive methods, such as navigating to another search engine’s website, changing default settings or installing different browsers or apps. But the agreed facts also recorded that many users do not typically change defaults or use those methods unless they have a reason to do so. In that commercial setting, preserving broad default and anti-promotion restrictions could make rival distribution materially harder.

The reasons also note that there was a difference between the parties about the product dimension of the relevant market. The available text confirms that the geographic dimension was Australia-wide and that it was a market in Australia within the meaning of section 4E, but it does not fully set out the product dimension discussion in the material reviewed here.

The Court accepted Google’s admissions and the Statement of Agreed Facts and Admissions. This was therefore not a contested liability trial where the Court had to resolve disputed evidence about what happened. Instead, the Court had to decide whether the agreed declarations were appropriate and whether the jointly proposed penalty was within the appropriate range.

The Court declared that Google contravened section 45(1)(a) twice. The first contravention was by arriving, in or around December 2019, at an understanding with Telstra that the parties would continue to be bound by the existing terms of their Google Mobile Revenue Share Agreement, including the Platform-wide Provisions, until they concluded negotiations regarding a further revenue-sharing agreement. The second contravention was the equivalent understanding with Optus.

For each contravention, the Court declared that the understanding was likely to have the effect of making it more difficult to obtain the distribution of general search engine services in Australia during the period from December 2019 until the end of March 2021 and thereby was likely to hinder competition in an Australia-wide market in which those services were supplied.

The Court ordered Google to pay a total pecuniary penalty of $55 million, comprising $27.5 million for each contravention, within 30 days. The Court also ordered Google to pay a contribution to the ACCC’s costs in the amount agreed between the parties within 30 days.

The reasons also record that, as part of the agreed resolution, the ACCC accepted a three-year undertaking from Google Asia Pacific Pte Ltd and Google LLC under section 87B of the Act. However, the detailed terms of that undertaking are not set out in the material reviewed here, so it is not possible to give a fuller public summary of the undertaking’s content without checking the complete documents.

The Court emphasised that even where parties jointly propose a penalty, it remains for the Court to determine whether the proposed amount is within the appropriate range. Moshinsky J was satisfied that the proposed total penalty of $55 million was within that range and made the orders accordingly.

Most businesses will never negotiate search defaults with national carriers. But many businesses do use agreements that shape how customers find products or services. Examples include software bundling, app preinstallation, marketplace placement, preferred supplier arrangements, reseller incentives, referral deals, white-label distribution, lead-generation arrangements and platform promotion agreements. This case is useful because it shows where the legal risk can sit: in the distribution mechanism and the restrictions attached to it.

If your business pays a partner for preferred placement, default status, preinstallation or promotional support, you should look beyond the headline commercial benefit and examine the surrounding restrictions. Risk increases where the arrangement says your product must appear across all customer access points, where the partner must not preload or suggest a rival, or where old restrictive terms continue while a new agreement is still being negotiated.

The case also shows that informal or interim arrangements matter. Businesses sometimes treat rollover periods as administrative housekeeping, especially where everyone expects a new deal to be signed later. But if the interim understanding keeps restrictive terms alive for months, and those terms affect how rivals can reach customers, the legal exposure can be real. Here, the understandings were reached in about December 2019, their duration was uncertain at the time, and they in fact continued until March 2021.

Another practical point is that the Court focused on likely competitive effect in the real commercial setting. The fact that users could theoretically switch search engines did not end the analysis. The agreed facts recognised that many users stick with defaults and do not take proactive steps unless they have a reason to do so. Businesses should therefore be careful about assuming that customer choice alone will neutralise the competition risk of a restrictive distribution clause.

This does not mean every exclusive or preferred arrangement is unlawful. The question is always what the provision does in context. Relevant considerations may include the importance of the channel partner, whether the restriction applies across all access points or only some, whether rivals are prevented from being preinstalled or promoted, how long the restriction lasts, and whether the arrangement is preserving old terms that the parties had already decided to move away from in the new deal structure.

For business owners, the practical response is to get competition review before rolling over restrictive channel terms. That is especially important where the arrangement affects defaults, discoverability, recommendations or preinstallation on devices, apps or platforms.

When businesses assess competition risk in channel arrangements, they should not limit the review to the final signed contract. This case involved understandings reached while new agreements were still being worked through. In practice, that means businesses should review emails, presentations, side letters, extension discussions, approval papers, payment continuation arrangements and any communications indicating that existing terms will continue until a new agreement is finalised.

The reasons show how commercially significant conduct can continue even when the parties intend to move to a different framework later. Here, Google had approved a new framework by around June 2019 that did not include equivalent Platform-wide Provisions, and presentations on the proposed new terms were made in October 2019. Even so, the old terms continued under the December 2019 understandings until March 2021.

Businesses should also separate what is required by contract from what happens in practice. The reasons note that after the old agreements expired and the new agreements were entered into, Telstra and Optus continued in practice to preinstall Google Search and set it as the default on search access points out-of-the-box. But the new agreements did not require that. That distinction can matter. A business may still obtain strong commercial outcomes without insisting on broad contractual restrictions that block rivals.

In other words, if your commercial objective can be achieved through narrower promotional criteria or limited placement rights, that may be very different from requiring exclusivity across all access points or preventing the partner from presenting alternatives to end users.

The key dates in the reasons are commercially important. By around June 2019, Google had approved a new framework that did not include equivalent Platform-wide Provisions. Presentations on the proposed new terms were made to Telstra and Optus in October 2019. By about December 2019, Google had arrived at the relevant understandings with each carrier. Those understandings continued until March 2021. Google then entered into a new agreement with Optus on 6 April 2021 and with Telstra on 31 May 2021. Judgment and orders were delivered on 2 December 2025.

The case status is final at first instance on the material reviewed here. The Court made declarations and orders as proposed by the parties after being satisfied that the penalty was within the appropriate range. The reasons are useful as a public guide to how the Court approaches agreed competition law outcomes, especially where the conduct concerns distribution restrictions and default settings.

This page is based on the Federal Court judgment in Australian Competition and Consumer Commission v Google Asia Pacific Pte Ltd [2025] FCA 1554, delivered by Moshinsky J on 2 December 2025. The reasons record Google’s admissions, the declarations made, the total penalty of $55 million, and the key factual background concerning the understandings with Telstra and Optus.

Some details remain limited in this public summary because the material reviewed here does not include the full detail of every annexure or the terms of the section 87B undertaking. Readers who need a complete technical account should check the full judgment package and annexed agreed facts.