China Launches Antitrust Probe into Google’s Market Dominance

By Du Zhihang and Denise Jia

China has launched an antitrust investigation into Google over alleged violations of its Anti-Monopoly Law. The probe may be linked to its Android ecosystem, advertising services and past market dominance.

The announcement by the State Administration for Market Regulation (SAMR) on Tuesday didn’t specify which aspects of Google’s business were under scrutiny or give further details. Google has yet to respond to Caixin’s inquiry regarding the investigation.

Google’s operations in China focus on keyword advertising services that help Chinese companies expand overseas, According to You Yunting, a senior partner at Shanghai Debund Law Offices, Google also licenses its Android operating system and Google Services Framework to Chinese firms and provides services such as Google Maps, Gmail and YouTube.

Google entered the Chinese market in 2006 with a localized version of its search engine but withdrew in 2010 because of censorship concerns and alleged cyberattacks, redirecting users to its uncensored Hong Kong site. As a result, many Google services, including Gmail and YouTube, were blocked on the mainland.

Having withdrawn its search engine, Google continued operating in China through its Android ecosystem, developer tools and advertising business. You suggested that due to strong competition from companies such as Meta Platforms Inc. and TikTok in keyword advertising, the antitrust case is unlikely to be based solely on this sector. The investigation is more likely to concentrate on Google’s Android system, Google Services Framework and essential mobile apps, You said.

The probe may also be connected to Google’s refusal to license its services to Huawei Technologies Co. Ltd., Yu added. Due to U.S. export restrictions, Google is barred from collaborating with Huawei because of U.S. export restrictions, while its services are technically incompatible with Huawei’s hardware. Whether Google used U.S. sanctions to stifle competition could be part of the investigation, Yu suggested.

Beyond advertising, Google provides various services in China, including cloud computing and artificial intelligence (AI) solutions for Chinese companies expanding overseas. While Android remains widely used in China, major smartphone brands such as Xiaomi, Vivo and Samsung develop their own versions of the system without pre-installing Google services like the Play Store. In AI research, Google’s open-source projects, such as TensorFlow and Kubernetes, have a strong presence in China’s developer community. The company also hosts an annual I/O developer conference in China to promote its technology.

Liu Xu, a researcher at Tsinghua University’s National Strategy Institute, pointed out that when Google acquired Motorola Mobility in 2012, China’s Ministry of Commerce carried out an antitrust review and found Google held a dominant position in the Android ecosystem. As a result, Google was required to provide free and open licensing for Android and treat all device manufacturers equally.

After Lenovo bought Motorola from Google in 2014, China’s Ministry of Commerce lifted some of Google’s obligations, including the requirement to treat all Android original equipment manufacturers (OEMs) equally, while other conditions remained in place.

Liu said that while Google has not violated its remaining obligations, it may have breached the now-lifted requirement to treat Android OEMs equally.

Despite Android’s past dominance, Liu emphasized that China’s smartphone market had evolved, with Huawei’s HarmonyOS gaining wider acceptance. Whether the SAMR can still classify Android as a dominant market player is uncertain, especially as users increasingly own multiple devices running different operating systems.

According to research firm Counterpoint, as of June 2024, Android held a 69% share of China’s mobile operating system market. Huawei’s HarmonyOS surpassed Apple’s iOS in the first quarter of 2024, reaching 17%, while iOS stood at 14%.

Google has faced multiple antitrust investigations in the United States and the European Union over Android, in-app payments, AI collaborations and advertising. The EU has fined Google more than 8 billion euros to date.

In November 2024, a U.S. court ruled that Google illegally maintained its monopoly in general search and text-based advertising through exclusive agreements. A month later, a U.S. court ruled in favor of Epic Games, having found that Google engaged in anti-competitive practices in app distribution and in-app payments, unlawfully restricting competition and causing harm to the game developer.

Liu added that given past investigations in the U.S. and EU, it is possible China’s probe could extend to Google’s search and advertising businesses under Article 2 of the Anti-Monopoly Law, which allows for extraterritorial enforcement. Since many Chinese businesses rely on Google for overseas advertising, any abuse of market power affecting Chinese companies would fall under China’s antitrust jurisdiction.

Contact reporter Denise Jia (huijuanjia@caixin.com)

caixinglobal.com is the English-language online news portal of Chinese financial and business news media group Caixin. Global Neighbours is authorized to reprint this article.

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