Google has agreed to pay a fine of 55 million Australian dollars ($36 million) after admitting to anticompetitive agreements with the country’s two largest telecommunications firms –Telstra and Optus.

The Australian Competition and Consumer Commission announced this on Monday, August 18.

The watchdog said Google’s Singapore-based Asia Pacific division signed contracts with Telstra and Optus that banned the installation of rival search engines on Android smartphones sold to customers.

The deals, which ran for 15 months until March 2021, ensured Google Search was the sole pre-installed option. In return, the telcos received a share of advertising revenue generated from users’ searches.

The ACCC said Google had accepted that the agreements were likely to “substantially lessen competition.”

The regulator has launched proceedings in the Federal Court, which will decide whether the AU$55 million penalty is appropriate.

In addition to the fine, Google has signed a court-enforceable undertaking requiring it to remove restrictions on pre-installation and default search engine options from future contracts with Android phone manufacturers and telecom operators.

“We’re pleased to resolve the ACCC’s concerns, which involved provisions that haven’t been in our commercial agreements for some time,” Google said in a statement.

ACCC chair Gina Cass-Gottlieb welcomed the outcome, warning that anti-competitive conduct harms consumers.

“Conduct that restricts competition is illegal in Australia because it usually means less choice, higher costs or worse service,” she said. “Importantly, these changes come at a time when AI search tools are revolutionising how we search for information, creating new competition.”

Last year, Telstra, Optus and rival TPG agreed to court-enforceable undertakings with the regulator, pledging not to renew or enter into similar deals with Google that limit search engine options.