SYDNEY, Aug 18 (Reuters) - 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 ( AAPL ) of preventing

rival application stores in their operating systems.

Google's YouTube was also last month added to an Australian

ban on social media platforms admitting users aged under 16,

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 ( TTRAF ) 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 ( AAPL ), and keep costs low," the spokesperson added.

Google owns Android.

A Telstra ( TTRAF ) 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.

($1 = A$1.5349)