Google has agreed to pay AU$55 million (US$36 million) after admitting to making anti-competitive agreements with Australia’s two biggest telecom companies, Telstra and Optus.

The Australian Competition and Consumer Commission (ACCC) announced the penalty on Monday, August 18.

The regulator explained that Google’s Asia Pacific branch in Singapore signed contracts with Telstra and Optus which stopped other search engines from being installed on Android smartphones sold to customers.

These deals lasted for 15 months, ending in March 2021, and made sure that Google Search was the only option available by default. In return, the telecom companies received a share of the advertising revenue generated from user searches.

Google admitted that the agreements likely reduced competition in the market.

The ACCC has taken the matter to the Federal Court, which will decide if the AU$55 million fine is the right amount.

As part of the settlement, Google has also signed a court-enforceable agreement. This prevents the company from adding similar restrictions in future contracts with Android phone manufacturers or telecom providers.

In a statement, Google said it was glad to resolve the concerns, noting that the contract terms in question had not been used for some time.

ACCC chair Gina Cass-Gottlieb welcomed the outcome, stressing that anti-competitive practices hurt consumers because they usually mean fewer choices, higher prices, or worse service.

She also pointed out that the timing is important as AI-powered search tools are changing the way people find information, bringing new competition into the market.

Last year, Telstra, Optus, and TPG agreed to binding commitments with the regulator, promising not to renew or sign new deals with Google that would block alternative search engines.