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BEIJING: China is preparing to launch an antitrust investigation into Alphabet Inc’s Google, investigating allegations that it has leveraged the dominance of its Android mobile operating system to stifle competition, two people familiar with the matter said.
The case was proposed by telecommunications equipment giant Huawei Technologies last year and has been submitted by the country’s top market regulator to the State Council’s antitrust committee for review, they added.
A decision on whether to proceed with a formal investigation may come as early as October and could be affected by the state of China’s relationship with the United States, one of the people said.
The possible investigation follows a series of actions by the administration of US President Donald Trump to hamper Chinese tech companies, citing national security risks.
READ: US Faces Continued Court Battles Over TikTok, WeChat Bans
This has included putting Huawei on its commercial blacklist, threatening similar actions for Semiconductor Manufacturing International Corp, and ordering TikTok owner ByteDance to ditch the short-form video app.
It also comes as China embarks on a major revamp of its antitrust laws with proposed amendments that include a dramatic increase in maximum fines and expanded criteria for judging a company’s control of a market.
A possible investigation would also look into allegations that Google’s market position could cause “extreme harm” to Chinese companies like Huawei, as losing the US tech giant’s support for Android-based operating systems would lead to loss. trust and income, said a second person. .
The sources were not authorized to speak publicly about the matter and declined to be identified. Google did not immediately provide 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.
THE EXAMPLE OF EUROPE
The US trade blacklist prohibits Google from providing technical support for new Huawei phone models and access to Google mobile services, the suite of developer services on which most Android applications are based.
Google had a temporary license that exempted it from Huawei’s ban, but it expired in August.
READ: China Must Prepare for ‘Long Tech March’ Following US Restrictions on SMIC: Report
It was not immediately clear which Google services the potential investigation would focus on. Most Chinese smartphone providers use an open source version of the Android platform with alternatives to Google services on their domestic phones. Google search, email and other services are blocked in China.
Huawei has said it missed its 2019 revenue target of $ 12 billion, which company officials have attributed to U.S. actions against it. Seeking to overcome its dependence on Google, the Chinese firm announced plans this month to introduce its proprietary Harmony operating system on smartphones next year.
Chinese regulators will look to examples set by their peers in Europe and India if they proceed with the antitrust investigation, the first source said.
“China will also look at what other countries have done, including consulting with Google executives,” the person said.
The second source added that a learning point would be how fines are imposed based on a company’s global revenue rather than local revenue.
LEE: China says the United States ‘abuses power’ by squeezing TikTok
The European Union fined Google 4.3 billion euros ($ 5.1 billion) in 2018 for anti-competitive practices, including forcing phone makers to pre-install Google apps on Android devices and preventing them from using search engine rivals and Android from Google.
That decision led Google to give European users more options over the default search tools and to give phone manufacturers more leeway to use competing systems.
Indian authorities are investigating allegations that Google is abusing its market position to unfairly promote its mobile payments application.
