The Australian Competition and Consumer Commission (ACCC) has accepted undertakings from Telstra and Optus amid its ongoing investigation into Google's search services. 

The development comes as part of the ACCC's broader Digital Platform Services Inquiry (DPSI), which aims to address competition and consumer issues associated with digital platforms.

Mobile devices have become the primary means for accessing general search services in Australia, with 95 per cent of adults using mobile phones to access the internet in 2023. 

Google's dominance in the search engine market is significantly influenced by its pre-installation agreements with mobile device distributors like Telstra and Optus. 

The ACCC's investigation has found that these agreements ensured Google’s search services were the default option on Android devices, limiting competition from other search engines such as Microsoft’s Bing, which has a small market presence in Australia.

“We are grateful for the cooperation of Telstra and Optus in responding to the ACCC’s competition concerns,” says Liza Carver, ACCC Commissioner.

“The undertakings will allow alternative search engines to be able to compete to be a default search engine on the Android devices these companies supply.”

Google's agreements with Telstra and Optus, in place since at least 2017, expired on 30 June 2024. 

These agreements had restricted rival search engines from being pre-installed and promoted on Android devices, with Google sharing advertising revenue with the telecom companies in return. 

Telstra and Optus have committed not to enter into new arrangements that require Google's search services to be the exclusive default search function on devices they supply.

The ACCC's investigation is ongoing, focusing on Google's conduct in entering such agreements more broadly. 

“We are continuing our investigation into Google’s conduct in entering into such agreements more broadly, as we consider this raises potential competition concerns. Accordingly, no further comment about the investigation will be made at this time,” Ms Carver said. 

The government has shown support for regulatory reforms recommended in the ACCC's fifth interim report of the DPSI, submitted in September 2022. These reforms aim to address harms from digital platforms and promote competition. 

The report proposed mandatory codes of conduct for certain platforms, a move that aligns with similar regulations implemented in the United Kingdom, Germany, Japan, and the European Union.

The market share of Google Search in Australia has remained around 98 per cent from September 2021 to February 2024, underscoring the impact of default settings on consumer behaviour. 

The ACCC's efforts to increase competition and consumer choice in digital platforms are part of a global trend to regulate and ensure fair competition in the digital economy.

“Globally, a range of measures are underway to protect and boost competition in the digital economy,” Ms Carver said. 

“In our view, these undertakings from Telstra and Optus are an important step in providing Australian consumers with more choice about the digital platforms and services they use, and encouraging more competition in these markets.”

The ACCC will submit its ninth interim report on the DPSI in September 2024 and a final report in March 2025.

Copies of the undertakings are available at: Telstra Limited and Telstra Group Limited and Optus Mobile Pty Ltd and Singtel Optus Pty Ltd