UPDATED 20:34 EDT / SEPTEMBER 30 2020

POLICY

Google faces antitrust probe in China as US lawsuit could be filed next week

Google LLC is facing an antitrust probe on a new front today, hot on the heels of news that it could be sued for antitrust by the U.S. Department of Justice as soon as next week.

The latest Google antitrust probe may come from China, Reuters reported today. The case is said to have been proposed by Huawei Technologies Co. Ltd. on the grounds that Google leverages Android to stifle competition. The proposal is currently in the hands of China’s top market regulator for review, with a decision on whether to proceed potentially coming as soon as October.

Given that the complaint comes from Huawei and involves Android, it comes as no surprise that the Trump administration’s ban on Huawei receiving U.S. tech including access to the licensed version of Android is driving the potential investigation. The probe would consider accusations that Google’s market position causes “extreme damage” to Chinese companies such as Huawei and that the loss of access to the licensed version of Android would lead to a loss of confidence and revenue.

Android dominates the Chinese mobile operating system market with a more than 80% market share as of August, according to Statcounter. Huawei can use the open-source version of Android on its new devices after the Trump administration ban, but in not being able to offer the licensed version on Android, Huawei can not offer Google apps.

That doesn’t affect the business in China, where most if not all Google apps are banned, but it damages the company’s business outside of China. Other Chinese smartphone companies such as Vivo Communication Technology Co. Ltd., Guangdong Oppo Mobile Telecommunications Corp. Ltd. and Xiaomi Inc. do not face the same issue.

Back in the U.S., a new report late Tuesday suggests that the Department of Justice is expected to sue Google as soon as next week and is currently in the process of urging state attorneys general to sign on to the lawsuit.

Speculation that the Justice Department is close to taking legal action against Google has been ongoing. A report Sept. 21 suggested that the lawsuit could be filed this month. Given it is now Sept. 30, that deadline has now been missed.

Whereas China’s antitrust lawsuit will focus on Android, the U.S. antitrust lawsuit may focus on several areas, with advertising likely to be at the top of the list. Google, through its acquisition of DoubleClick in 2007 for $3.1 billion, now holds a 59.6% share of general online advertising as of 2019, according to one measure, and eMarketer says it’s 73.1%.

The recent rush to bring Google to court may also be driven by politics. The lawsuit is being pushed by Attorney General William Barr. The current administration, should it not be reelected Nov. 3, would have until Jan. 20 to pursue the lawsuit.

Photo: Spiros Vathis/Flickr

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