China preparing an antitrust investigation into Google

Platform News: Google movements

China is preparing to launch an antitrust probe to Google, considering allegations it’s leveraged the dominance of its Android cellular working platform to stifle competition, two people familiar with the issue said.

The case was suggested by telecommunications equipment giant Huawei this past year and has been filed from the nation’s leading market regulator to the State Council’s antitrust committee for review, they included.

A decision on whether to go forward with a formal investigation may come when October and could be impacted by the state of China’s relationship with the US, one of those folks said.

The potential investigation follows a raft of activities by US President Trump’s administration to hobble Chinese tech companies, citing national security dangers.

This has included putting Huawei on its trade blacklist, threatening similar action for Semiconductor Manufacturing International Corp and ordering TikTok proprietor ByteDance to divest the short-form video app.

It also comes as China embarks on a major revamp of its own antitrust laws with suggested amendments such as a dramatic rise in maximum fines and expanded criteria for judging a business’s management of a market.

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A potential probe would also appear at accusations that Google’s market position could cause”extreme damage” to Chinese companies such as Huawei, as shedding the U.S. technology giant’s support for Android-based functioning systems would result in lack of assurance and earnings, another person said.

The resources were not authorised to speak publicly about the matter and declined to be identified. Google did not provide immediate comment, while Huawei declined to comment.

China’s top market regulator, the State Administration for Market Regulation, and the State Council did not immediately respond to requests for comment.

EUROPE AS AN EXAMPLE

The US trade blacklist bars Google from providing technical assistance to new Huawei Technologies mobile phone models and accessibility to Google Mobile Services, the package of programmer services upon which most Android apps are established.

Google needed a temporary permit that exempted it from the ban on Huawei but it expired in August.

It wasn’t immediately clear what Google services the potential probe would focus on. Most Chinese smartphone vendors utilize an open-source variant of the Android platform with alternatives to Google services in their domestic phones. Google’s search, email and other services are blocked in China.

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Huawei has said it missed its 2019 revenue goal by $12 billion, which company officials have attributed to US action against it. Seeking to overcome its reliance on Google, the Chinese company announced plans this month to present its own proprietary Harmony operating system in smart phones following year.

Chinese authorities will be studying examples set by their peers in Europe and in India in case it proceeds with the antitrust investigation, the first source said.

“China will also look at what other countries have done, including holding inquiries with Google executives,” said the individual.

The second source added that one learning stage is how penalties are imposed based on a firm’s global revenues instead of local earnings.

The European Union fined Google 4.3 billion euros (approximately $5.1 billion) in 2018 over anticompetitive practices, such as forcing phone manufacturers to pre-install Google apps on Android devices and preventing them from using rivals to Google’s Android and search engine.

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That decision prompted Google to give European consumers more choice over default tools and giving handset manufacturers more leeway to use systems that are competing.

Indian authorities are now looking into allegations that Google is abusing its market position to adequately promote its cellular payments app.

The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Cheng Leng in Beijing, Keith Zhai in Singapore, and David Kirton in Shenzhen. Additional reporting by Paresh Dave in San Francisco. Editing by Tony Munroe and Edwina Gibbs.

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