Telstra and Optus End Agreements with Google for Search Services

Quick Read

• Telstra and Optus have ended their agreements with Google.
• These agreements involved pre-installing Google’s search services on Android devices.
• The investigation that resulted in this change was started by the ACCC.
• The objective of the decision is to improve consumer options and boost market competition.
• Google Search holds a leading 98% market share in Australia.
• The ACCC’s inquiry into digital platforms is set to publish its ninth report in March 2025.

Termination Background

Telstra and Optus have chosen not to renew or form new contracts with Google for pre-installing its search services on Android devices. This choice follows an inquiry by the Australian Competition and Consumer Commission (ACCC). The previous agreements expired at the end of last month.

The ACCC’s Role

The ACCC began the investigation as a part of its continuous digital platform services inquiry. The ACCC stated that Telstra and Optus had been engaging in these agreements with Google since at least 2017. The commission contended that these arrangements restricted the capacity for competing search engines to be pre-installed and promoted on Android devices, ultimately impacting consumer choice and innovation.

Implications for Consumers

The ACCC has agreed to enforceable commitments from both Telstra and Optus. These commitments are anticipated to give Australian consumers a wider range of options concerning digital platforms and services they utilize. Furthermore, it seeks to promote increased competition within these markets.

“Engaging in practices like forming agreements to guarantee exclusivity can restrict consumer options or hinder innovation,” stated ACCC commissioner Liza Carver.

Market Dynamics

Even after this change, Google Search continues to dominate the Australian market, maintaining a steady 98% market share from September 2021 to February 2024. Alternative search engines, such as Microsoft’s Bing, have only a minimal presence. This dominance has led to concerns among regulators about the suppression of competition and innovation.

The Broad Digital Platforms Investigation

The ACCC’s investigation into digital platforms has explored different facets of the technology behind social media platforms and their possible negative effects. To date, multiple reports have been generated on these topics. The ninth report from this investigation is anticipated to be published in March 2025 and may offer additional recommendations to promote fair competition in digital markets.

For additional information on similar reports from the ACCC, check out TechBest’s piece on data transparency for major platforms: Data Transparency for Major Platforms.

Summary

Telstra and Optus have decided to end their long-term agreements with Google to pre-install its search services on Android devices. This change comes after an ACCC investigation aimed at promoting more consumer choices and competition within the market. While Google still leads the Australian search engine market, this shift could offer opportunities for competing search engines to establish themselves. The ACCC will carry on with its digital platforms inquiry, with the next significant report scheduled for March 2025.

Q&A Session

Why did Telstra and Optus end their agreements with Google?

A:

The discontinuation came after an ACCC investigation revealed that these agreements restricted consumer choice and hindered competition by stopping competing search engines from being pre-installed on Android devices.

Q: How will this affect consumers in Australia?

A:

This decision aims to give consumers more options for the search engines they can use on their devices, which could lead to increased competition and innovation in the market.

How prevalent is Google Search in Australia?

A:

As of February 2024, Google Search commands a remarkable 98% market share in Australia, showcasing its substantial dominance over other search engines such as Bing.

Q: What is the digital platforms inquiry conducted by the ACCC?

A:

The ACCC’s inquiry into digital platforms explores different facets of technology utilized by social media channels and other online services, zeroing in on topics such as market competition and consumer protection. The inquiry is set to publish its ninth report in March 2025.

What might be the potential long-term consequences of this action?

A:

If successful, this initiative could create a more competitive market, allowing alternative search engines to flourish and provide enhanced services and innovations to consumers.