Risk managers are being urged to take a closer look at how their organisations strike digital platform and distribution deals after Google Asia Pacific was hit with a $55 million penalty for anti‑competitive conduct in Australia.
The Federal Court ordered the payment in response to arrangements Google reached with Telstra and Optus over the pre‑installation and default setting of Google Search on Android smartphones sold between December 2019 and March 2021. The case was brought by the Australian Competition and Consumer Commission (ACCC).
Under those arrangements, the two telcos agreed to pre‑install Google’s search app on Android devices, set it as the default search option, and refrain from pre‑installing competing search engines. In return, Telstra and Optus received a share of advertising revenue generated when users conducted searches on those phones.
Google admitted the conduct and accepted that the arrangements were likely to have the effect of substantially lessening competition in the Australian search market. The company cooperated with the ACCC and joined in submissions on the appropriate level of penalties.
In approving the agreed $55 million sanction, Federal Court Justice Mark Moshinsky observed that civil penalties are designed to deter both future breaches by the relevant company and similar behaviour by other firms, stating that “the primary if not sole purpose of civil penalties is deterrence of further contravening conduct of a like kind”.
The new penalty adds to a $60 million fine imposed on Google in 2022 over the collection of location data from some Android users, underscoring the scale of financial exposure when digital practices fall foul of Australian law.
A sharp signal on competition and conduct risk
For corporate risk managers, the case is notable less for its technical details than for what it reveals about regulatory expectations around market power, access and defaults in the digital economy.
ACCC deputy chair Mick Keogh said: “This penalty should send a strong message to all businesses that there are serious and costly consequences for engaging in anti-competitive conduct.”
He emphasised the broader principle at stake.
“Our market economy is predicated on businesses competing freely with each other, which is why locking out competing businesses in a way that substantially lessens competition is illegal,” he said.
The facts of the Google matter may seem specific to search, but the underlying pattern – a dominant digital service securing exclusive default status on widely used devices – is increasingly common in other sectors, from software and payments to communications and media.
Risk managers overseeing enterprise‑wide risk frameworks may therefore need to treat competition law and digital platform conduct as more than a narrow legal concern, particularly in organisations that rely on exclusive distribution agreements, bundling, or default settings with powerful intermediaries.
Undertakings reshape Android search defaults
Alongside the financial penalty, the case has triggered a set of court‑enforceable undertakings that change how search services may be configured on Android devices supplied in Australia.
Google and its US parent, Google LLC, have committed to removing certain pre‑installation and default search engine restrictions from contracts with Android phone manufacturers and telecommunications providers. This is intended to ease the path for alternative search engines to gain a presence on new devices.
Separately, Telstra, Optus and TPG have undertaken not to enter into new arrangements with Google that require its search service to be both pre‑installed and set as the exclusive default on Android phones they supply.
Under these undertakings, the telcos can configure search services differently on individual devices, choose settings that do not match Google’s defaults, and enter pre‑installation agreements with other search providers.
Keogh said these steps opened the door to more competition at a time when search technology is being reshaped by artificial intelligence.
“Today’s outcome, combined with the undertakings from Google and the telcos, creates the potential for millions of Australians to have greater search choice in the future. Other search tools, including those enhanced by artificial intelligence, can now compete with Google for pre-installation on Android phones,” he said.
“Search tools, including those that incorporate AI, are rapidly changing how we search for information, and it’s critical that competitors to Google can gain meaningful exposure to Australian consumers.”
For risk professionals, those comments provide a useful signal: regulators are watching not just traditional markets, but also how emerging AI‑enabled services are promoted and embedded into consumer devices and digital journeys.
Part of a wider digital enforcement agenda
The ACCC has identified competition issues in the digital economy as an ongoing compliance and enforcement priority. The Google proceedings sit within a broader push to address the influence of large technology platforms.
The commission’s five‑year Digital Platform Services Inquiry, completed earlier this year, examined how digital platforms affect competition and consumers across search, social media, app stores and other services. In its fifth report, published in 2022, the ACCC recommended a new regulatory framework for “designated” digital platforms, including mandatory, service‑specific codes to tackle conduct such as exclusive pre‑installation and default arrangements that hinder competitors.
Treasury has consulted on a proposed approach to implement a digital competition regime administered by the ACCC, suggesting that individual enforcement cases may soon be complemented by more prescriptive rules.
For organisations that depend heavily on digital platforms to reach customers or employees, this evolving regime adds an additional layer of regulatory risk alongside privacy, cyber security, consumer law and prudential obligations.
While the Google penalty is directed at a large technology company and major telecommunications providers, it offers several lessons for risk managers across sectors:
In practical terms, the Google ruling suggests several immediate actions for risk leaders:
The penalty imposed on Google ultimately turns on a specific question of search defaults on Android devices. For risk managers, its real importance lies in the clear message that regulators are prepared to scrutinise and sanction the way powerful digital gateways are used – a message that will matter increasingly as organisations compete, and collaborate, in a more tightly regulated digital landscape.
