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The Indo-Romanian combo went down 3-6, 3-6 to their 10th-seeded opponents at the Rod Laver Arena.
The French pair recovered from a set down to beat Americans Coco Gauff and Jessica Pegula 2-6, 6-3, 6-2.
Iga Swiatek, who became the first Polish player to win a Grand Slam singles title when she beat Kenin in the French Open final, was named the WTA's Most Improved Player of the Year.
Mladenovic is one of 10 players who came in contact with France's Benoit Paire, who was pulled out from the men's field at the hardcourt major after testing positive for the new coronavirus.
Babos and Mladenovic won their second Australian Open women's doubles crown in three years, beating top seeds Hsieh Su-Wei and Barbora Strycova 6-2, 6-1.
Former women's world No. 1 Halep suffered a shocki defeat at the hands of American qualifier Taylor Townsend.
Williams, returning to the US Open after last year's infamous final in which her row with the chair umpire overshadowed Naomi Osaka's maiden Grand Slam victory, used her trademark power to overwhelm Sharapova in the first New York meeting between two of the sport's biggest names.
She is the first player to go through the season-ending tournament undefeated since Serena Williams in 2013.