Google LLC and Google Asia Pacific Pte Ltd

The Australian Competition and Consumer Commission (ACCC) has accepted a court enforceable undertaking (Undertaking) from Google LLC and Google Asia Pacific Pte Ltd (Google Asia Pacific) in relation to the ACCC’s concerns about a series of contractual arrangements they and/or related Google entities (collectively, Google) entered into with Android Original Equipment Manufacturers (OEMs) and Australian Mobile Network Operators (Australian MNOs) regarding the preinstallation and placement of Google Search and the Chrome Browser Application on Android devices. The ACCC considers that certain provisions in these contractual arrangements, when taken together with provisions in other contracts, contravened section 45 of the Competition and Consumer Act 2010 (Cth) (CCA), which prohibits anticompetitive agreements.

Since at least 2017, Google has entered into the following types of contractual agreements containing provisions that have raised certain competition concerns for the ACCC:

• Mobile Application Distribution Agreements (MADAs) with a number of OEMs that supply Android mobile devices in Australia, and
• Revenue Share Agreements (RSAs) with Australian MNOs (specifically Telstra, Optus and TPG) and a number of OEMs that supply Android mobile devices in Australia.    

The ACCC considers that Google LLC and Google Asia Pacific’s entry into contracts containing certain provisions, when taken together with provisions in other contracts, had the purpose, effect or likely effect of substantially lessening competition in a market in which general search engine services are supplied in Australia, by hindering the distribution of such services in Australia.

Google does not agree with all of the ACCC’s concerns. Nevertheless, Google has cooperated with the ACCC and, to address the concerns, Google LLC and Google Asia Pacific provided the ACCC with a section 87B undertaking that they will, with respect to Android devices supplied in Australia, ensure that:

• Google’s contractual arrangements allow for OEMs and Australian MNOs to choose to preload, place, promote or set as a default at any search access point, on an Android Device-by-Android Device and search access point-by-search access point basis, any general search engine, including without compromising their entitlements in respect of any search default rights granted to Google for any other search access points;   
• Google’s contractual arrangements do not restrict Android OEMs or Australian MNOs developing, distributing, preloading, placing, displaying, using, selling, promoting or licensing any general search engine service from a third-party general search provider, or Australian MNOs changing the default search settings from initial factory settings (other than in relation to Google Chrome);
• OEMs can choose to licence GMS applications, including Google Play, separately from the Google Search and Google Chrome browser applications.

Google LLC and Google Asia Pacific have also undertaken to establish a competition law compliance program that complies with the requirements set out in the Undertaking. 

As part of the resolution of the ACCC’s investigation into these matters, the ACCC has also instituted proceedings in the Federal Court of Australia against Google Asia Pacific, in relation to two past anticompetitive understandings Google admits it reached with each of Telstra and Optus in or around December 2019.  Google has cooperated with the ACCC, and admitted that by arriving at those two understandings, Google Asia Pacific engaged in two separate contraventions of section 45 of the CCA, and will jointly submit to the Court that it should pay a penalty of $55 million.  The Federal Court will consider whether to make the orders sought on a date to be fixed.