Despite China celebrating the Lunar New Year over the past week, the festivities were overshadowed by the country's sharp response to the latest tariffs imposed by US President Donald Trump. Amid Beijing's sweeping counteractions, the initiation of an opaque investigation into Google stood out. While China has scrutinized Google in the past, the timing of this probe suggests a strategic display of its antitrust muscle, further complicating the regulatory environment for companies in the US and beyond.
Despite China celebrating the Lunar New Year over the past week, the festivities were overshadowed by the country's sharp response to the latest tariffs imposed by US President Donald Trump. Authorities were far from idle during the holidays, launching a barrage of countermeasures yesterday against the US on the eve of returning to official duties today after the week-long break.
Yesterday's retaliatory steps included increasing tariffs, tightening export controls on rare metals, adding two US companies to China's unreliable-entity list, and lodging a formal complaint with the World Trade Organization (see here).
Amid these sweeping actions, one particular move stood out: the initiation of an opaque probe into Google (see here).
The announcement by China's State Administration for Market Regulation, or SAMR, was short on details. However, MLex understands that SAMR's scrutiny of Google has been brewing for some years, including a focus on the anti-fragmentation policy for its Android operating system.
This policy has allegedly led to accusations from Chinese smart-device manufacturers that Google is abusing its dominance, it is understood.
While the exact reasons for the probe might seem critical, the broader context paints a different picture. As noted by a Chinese antitrust observer, "It doesn’t matter what conduct is being targeted, because China can target whatever conduct it wants."
These observations underscore the strategic use of antitrust investigations as a political lever, in addition to enforcing legal standards.
This development sends a clear warning to all US businesses operating in China, especially those whose practices have already attracted regulatory and industry criticism.
The timing of the counteractions — coinciding with the new 10 percent US tariffs taking effect — signals a highly coordinated Chinese offensive. Commerce, antitrust and customs authorities are acting under the command of the State Council, the country's cabinet.
This orchestration, which apparently predates Trump's presidency, positions multinationals such as Google at the epicenter of a geopolitical storm. It highlights the complex interplay between global trade policies and corporate strategies.
— The Android controversy —
Right after SAMR announced its Google probe, Fang Xingdong, a trailblazer in China's Internet development, commented on his WeChat account that Android's monopolistic power poses significant risks if left unchecked.
He emphasized that the anti-fragmentation clause, which binds domestic smartphone makers exclusively to Android, should be abolished. He described it as “an issue that's finally seeing regulatory action after years of advocacy.”
Anti-fragmentation agreements mandate that device manufacturers exclusively use Google's approved Android version to access Google services, prohibiting them from creating modified "Android forks" or proprietary operating systems.
MLex understands that Huawei lodged a complaint on this matter in 2019, around the time it launched its HarmonyOS operating system, regarding Google's restrictive policy as an obstacle to promoting its OS.
However, the complaint lost traction at that time, during Trump's first term, it is said.
Separately, in 2014, antitrust scholar Liu Xu urged the State Administration for Industry and Commerce, one of China's three former antitrust agencies, to investigate Google's ban on Alibaba's YunOS, according to a post published on his WeChat account.
In December 2024, the Android smartphone operating system boasted a market share of more than 77 percent in China, according to German data company Statista. Its closest rival, Apple’s iOS, had a share of about 22 percent.
Back in 2012, when approving Google’s purchase of Motorola Mobility, China’s Ministry of Commerce, the then merger regulator, found that Google's Android system had 74 of the Chinese market for mobile-device operating systems, surpassing the threshold for being considered dominant.
Beyond anti-fragmentation agreements, SAMR’s inquiry may delve into other Google practices, as Beijing appears more emboldened than ever to wield competition law to counter US policies.
In 2024, Google's parent company Alphabet reported revenue of $350.02 billion. In the fourth quarter, its Google Services posted revenue of $84.09 billion and its Google Cloud $11.96 billion. It didn’t provide a breakdown on the figures for China.
It’s noteworthy that major Google services, including search and YouTube, are banned in China.
SAMR is empowered to impose a fine of up to 10 percent of an infringing company's turnover in the preceding year. In many instances, SAMR limited the basis for calculating fines to Chinese sales. Under the revised 2022 antitrust law, violations involving particularly serious circumstances can incur fines up to five times the initial penalty.
— Political weapon —
China's antitrust enforcement has been inherently political since the Antimonopoly Law took effect in August 2008.
This intertwining of politics and regulation is evident from the 2009 termination of Coca-Cola’s proposed acquisition of the Chinese brand Huiyuan Juice, a decision fueled by a public outcry steeped in nationalism. Similarly, during heightened trade tensions in 2018, the silent treatment from SAMR contributed to Qualcomm’s scrapped takeover of Dutch rival NXP Semiconductors.
More recent cases include the record $2.8 billion fine against Alibaba aimed at curbing the "disorderly expansion of capital," as well as SAMR's probe of Nvidia for violation in the AI chip heavyweight's purchase of Israeli counterpart Mellanox (see here).
For the Nvidia case, the investigation was announced just days after the US Commerce Department unveiled a package of rules on Dec. 2 to further impair China's capability to produce advanced-node chips.
US companies such as Broadcom's VMware, which has recently seen complaints filed against it by several Chinese companies alleging abuse of dominance, should remain vigilant (see here).
After all, since the onset of the 2018 trade war, China has quickly adapted, accumulated experience and honed its regulatory tactics, ensuring it is no longer caught off guard as it was by Trump's initial maneuvers during his first term.
Google has yet to respond to a request for comment.
—Analysis by Yonnex Li and Yang Yue
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