Sunday, 01 November 2020

China lining up antitrust probe into Google at Huawei’s request

by Harry Baldock, Total Telecom
Wednesday 30 September 20

The investigation will assess whether the dominance of Google’s Android mobile operating system has unfairly quashed competition

According to anonymous sources, China is preparing to launch an investigation into Google following accusations that the company’s Android operating system has served to smother competition. The investigation would also explore whether Google’s dominant market position could be directly damaging to Chinese companies.   The case was first proposed by Huawei last year and has now been passed on to the State Council&rsquo…

According to anonymous sources, China is preparing to launch an investigation into Google following accusations that the company’s Android operating system has served to smother competition. The investigation would also explore whether Google’s dominant market position could be directly damaging to Chinese companies.

 

The case was first proposed by Huawei last year and has now been passed on to the State Council’s antitrust committee.

 

A decision as to whether move forward with a formal investigation is likely to come as soon as October, with sources saying that the decision will likely be influenced by the current political situation between China and the US. Relations between the two nations right now are fraught, with the US applying new sanctions to China’s largest semiconductor company SMIC just earlier this week. Meanwhile, China itself is retaliating by creating its own ‘entity list’ for US companies.

 

Amidst this highly charge conflict, it should come as no surprise that Google is falling into the firing line for China. However, it should also be remembered that this is hardly the first time Google has fell afoul of antitrust legislation. Back in 2018, the EU fined the company €4.3 billion for anticompetitive practices, such as making phone manufactures pre-install Google apps. More recently, India has been investigating Google for abusing its market position.

 

According to sources, China will be using these previous instances as a framework for how to handle the US giant. 

 

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

 

Last week, Huawei announced that it would be releasing its own operating system, Harmony, for developers as early as December 2020, in a bid to reduce its reliance on Google’s Android. However, analysts suggest that getting people on board with the Harmony OS may be difficult; with Huawei’s semiconductor supply chain under so much pressure from US restrictions, limiting its ability to deliver handsets, the vendor will not be able to rely on its own devices to proliferate the new system alone.

 

As such, Huawei has been petitioning its domestic rivals to adopt its operating system in a show of solidarity against US pressure. However, companies like Xiaomi and Oppo are unlikely to want to move away from Android to the much weaker Harmony OS, especially as doing so would directly help a domestic competitor. 

 

That said, with so many geopolitical machinations at play, it is not inconceivable that the Chinese government to get involved on some level to support the development of a domestic operating system. If that were to happen, the likes of Xiaomi and Oppo would be given little choice but to make the switch.

 

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