Google agreed to pay A$55 million after the ACCC ruled its exclusivity deals with Telstra and Optus broke competition law. From December 2019 to March 2021, Google paid the telcos a share of its advertising revenue in exchange for making Google Search the only pre-installed option on Android phones. The case shows how pricing and competitive strategy extends beyond consumer prices to the contracts and deals that shape markets.

 

At first glance, this may look like a technology or legal story. But the implications go further. It is about how pricing power is created and defended. The real levers of pricing often sit not on the invoice but in how contracts are structured, markets are shaped, and value is distributed.

 

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What Google’s Case Reveals About Pricing and Competitive Strategy

 

The ACCC intervened because Google’s deal restricted consumer choice and entrenched its already dominant position. By making Google Search the default on millions of devices, rivals were effectively locked out. Google admitted that the deal was likely to reduce competition.

 

For consumers, prices at the checkout did not change. Yet the impact was still significant. With competition limited, alternative search providers were denied the chance to grow. Consumers lost the ability to easily experiment with different search options, especially at a time when AI-based search tools are emerging as serious competitors.

 

For the market, the result was the reinforcement of Google’s 98% share of the Australian search market. That level of dominance is rarely about value alone—it’s about access and control. And when one company controls access, it holds the pricing power. And when one company controls access, it holds the pricing and competitive strategy advantage.

 

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Pricing Power Extends Beyond the Price Tag in a Competitive Market

 

When most people think of pricing, they think of the number on a shelf, an app, or an invoice. But as this case shows, pricing and competitive strategy extends far beyond that.

 

Contracts, distribution agreements, and revenue-share deals shape how markets function. They decide who sets the rules, who captures the value, and who gets excluded. In this case, Google ensured its ad revenue model was protected. Telstra and Optus secured a predictable new income stream without needing to improve their core services. Smaller competitors, however, were priced out of the market by lack of visibility—a clear example of how pricing in a competitive market can be distorted.

 

The important point here is that when a firm relies on control instead of competition, it no longer needs to justify its price logic. It does not need to innovate or defend its value proposition. It simply wins by default. That is not sustainable for businesses with pricing power that want long-term trust and resilience.

 

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The Hidden Risks of Exclusivity and Opaque Deals in Pricing and Competition

 

Exclusivity and revenue-share agreements can seem attractive. They offer guaranteed returns and reduce uncertainty. In a short-term view, they look efficient. But the long-term risks are often overlooked in pricing and competitive strategy.

 

First, there is the compliance risk. Regulators are now paying close attention to hidden pricing levers in digital markets. Once a deal is labelled anti-competitive, it can unravel business models overnight. The A$55 million fine is a financial hit, but the reputational cost is harder to measure.

 

Second, there is the trust risk. Customers may not see the fine print of a contract, but they feel the results when their choices shrink. Over time, this erodes trust in both the brand and the industry, particularly in businesses with pricing power.

 

Finally, there is the innovation risk. When markets are closed, the pressure to compete weakens. Companies lose the incentive to improve products, efficiency, or service. That weakens the entire ecosystem and distorts pricing in a competitive market.

 

In other words, the very deals that promise efficiency can undermine resilience.

 

 

 

Lessons for Pricing Teams on Building Sustainable Pricing and Competitive Strategy

 

For pricing teams, do not chase pricing power through exclusivity or opaque arrangements. These may deliver revenue in the short term, but they expose the business to regulatory intervention and reputational damage. Strong pricing and competitive strategy avoids these risks.

 

True pricing strength comes from defending value in open competition. It comes from clarity, fairness, and choice. When customers see genuine value, they accept the price. When regulators see fair play, they allow firms to compete freely—creating healthier conditions for businesses with pricing power.

 

A pricing strategy built on transparency is not only safer—it is also stronger in pricing in a competitive market.

 

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What Executives Can Learn About Google Business Strategy and Pricing Risks

 

For executives, the risk is strategic. A revenue-sharing deal may seem like a smart commercial incentive, but if it closes markets, it can be judged anti-competitive. That can put years of growth and pricing and competitive strategy at risk.

 

This is the moment to review distribution and partnership agreements. Ask three simple questions:

 

  • Does this deal promote fair pricing and competition?
  • Does it create sustainable value for customers and partners?
  • Could regulators view it as anti-competitive?

 

If the answer to any of these is uncertain, then the business is exposed. Sustainable growth depends on strategies that can withstand scrutiny—not just from regulators, but also from customers and investors.

 

Value-based pricing, supported by openness and fair competition, is the path to resilience for businesses with pricing power in a competitive market.

 

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How Businesses with Pricing Power Can Compete Fairly

 

Google’s A$55 million fine is more than a legal case—it’s a lesson in where pricing and competitive strategy really lies. True pricing power comes not from locking down markets but from building value that customers choose freely.

 

Businesses that rely on hidden levers risk losing both trust and flexibility. Regulators are watching, customers are aware, and competitors are ready to move in. In today’s environment, businesses with pricing power must recognise that advantage is fragile when built on control rather than value.

 

Reassess your pricing agreements and revenue models now. Make sure they are transparent, value-driven, and defensible. Pricing power built on blocking competition is temporary. Pricing power built on value and trust lasts in a competitive market.

 

If this is something you’re considering, let’s start a conversation. Together, we can make sure your pricing approach is compliant, resilient, and built for long-term success.

 

For a comprehensive view of building a great pricing team to prevent loss in revenue, Download a complimentary whitepaper on How to Improve Your Pricing Team Performance.

 

Are you a business in need of help aligning your pricing strategy, people and operations to deliver an immediate impact on profit?

If so, please call (+61) 2 9000 1115.

You can also email us at team@taylorwells.com.au if you have any further questions.

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