Google agreed on Monday to pay a A$55 million ($35.8 million) fine in Australia after the consumer watchdog found it had hurt competition by paying the country's two largest telcos to pre-install its search application on Android phones, excluding rival search engines.

The fine extends a bumpy period for the Alphabet-owned internet giant in Australia, where last week a court mostly ruled against it in a lawsuit brought by Fortnite maker Epic Games, accusing Google and Apple of preventing rival application stores in their operating systems.

Google's YouTube was also added to an Australian ban on social media platforms admitting users aged under 16 last month, reversing an earlier decision to exempt the video-sharing site.

On anti-competitive tie-ups with Australian telcos, the country's consumer watchdog on Monday said Google struck deals with Telstra and Optus, under which the tech giant shared with them advertising revenue generated from Google Search on Android devices between late 2019 and early 2021.

Google admitted the arrangement had a substantial impact on competition from rival search engines, and has stopped signing similar deals while also agreeing to the fine, the Australian Competition and Consumer Commission (ACCC) added.

"Today's outcome ... created the potential for millions of Australians to have greater search choice in the future, and for competing search providers to gain meaningful exposure to Australian consumers," ACCC Chair Gina-Cass Gottlieb said.

Google and the ACCC have jointly submitted to the Federal Court that Google should pay the A$55 million fine.

The court must still decide if the penalty is appropriate, the ACCC said, but the cooperation between the regulator and Google has helped avoid lengthy litigation.

A Google spokesperson said the company was pleased to resolve the ACCC's concerns, which involved "provisions that haven't been in our commercial agreements for some time".

"We are committed to providing Android device makers more flexibility to pre-load browsers and search apps, while preserving the offerings and features that help them innovate, compete with Apple, and keep costs low," the spokesperson added.

Google owns Android.

A Telstra spokesperson referred Reuters to an earlier statement saying it and Optus, owned by Singapore Telecommunications had fully cooperated with the ACCC and promised not to sign agreements with Google to pre-install its search product since 2024.

SingTel was not immediately available for comment.