Amid escalating tensions between China and the U.S., there have been repercussions for Chinese companies. Beginning with Huawei and ZTE, TikTok and WeChat too faced the wrath of the U.S. authorities. While WeChat was banned and TikTok is on the verge of selling 20 percent of its business, telecommunication equipment giant Huawei was completely isolated, prohibiting American companies from doing business with it. Now, China is hitting back and the first target is Google.
Chinese authorities are taking up an antitrust probe into Google following Huawei's complaint in 2019. The Chinese company accused Google of using its Android operating system to suppress the competition. In China, Android devices dominate the market and most of the Chinese mobile manufacturers depend on Google's Android OS.
After Huawei was named in the Entity List or blacklist for "national security risk", alleging that it used its network equipment to spy on Americans. Trump Administration prohibited U.S. companies including Google from doing business with the Chinese firm. Huawei mobile phones which ran on Android-based OS lost Google's support and it impacted its sales, forcing the company to miss its revenue target by $12 billion.
Following that, Huawei submitted an antitrust case to China's State Administration for Market Regulation alleging "extreme damage to Chinese companies". The case was forwarded to State Council's antitrust committee for further evaluation.
What Does It Mean for Google?
While most of the Google services including search, Gmail, Maps among others are banned in China, it has over 80 percent market share in the mobile operating system. In addition, China has recently strengthened its antitrust law with a sharp increase in the fines while also expanding criteria to judge a company's monopoly.
Hence, with tumultuous relations with the U.S., China may want to use the opportunity to punish Google. A decision on the antitrust lawsuit is expected by next month.
Growing Antitrust Lawsuits Against Google
However, China isn't the only country where Google is facing such a lawsuit. European Union brought in an anti-trust lawsuit and fined the company $5.1 billion in 2018 for anti-competitive practices. The EU alleged that Google forced phone manufacturers to preload Google apps on Android devices while it also forced them to make Google search its default web search engine.
In its second-biggest market, India, the tech giant is also facing a similar lawsuit. The authorities are probing allegations that Google has used its dominant market position to promote its own mobile payments app Google Pay on the Play Store. The U.S. Department of Justice is also preparing an antitrust case against the company for harming rivals and consumers through its search and advertising services.
A source close to the development in China told Reuters that the country will follow examples from Europe and India if an antitrust lawsuit is filed. If that happens, it would mean a larger fine than the EU as a retaliatory measure. "China will also look at what other countries have done, including holding inquiries with Google executives," the source said.