Thursday, 01 October 2020 06:35

Google may soon face anti-trust suits in US, China: reports Featured


Search giant Google may soon face anti-trust suits both in the US and China, with Reuters reporting that the US Department of Justice is trying to persuade the attorneys general in states to sign up.

The news agency also reported that Beijing's probe would examine claims that Google had used the dominance of its Android mobile operating system to limit competition.

Regarding the US action, Reuters cited three sources said to be familiar with the process as saying the suit would allege that Google had been trying to disadvantage its rivals by not allowing them access to data about users and their likes and dislikes which are needed to better their advertising to people.

The case in China has been suggested in 2019 by Chinese telecommunications equipment vendor Huawei Technologies and the market regulator had sent the case to the State Council's anti-trust panel for review, two sources were quoted as having told Reuters.

A decision on whether to go ahead with the probe or not could be affected by the state of US-China relations, the sources added.

In May 2019, the US placed Huawei on its Entity List; American firms cannot sell products made in the US with more than 25% of American content to companies placed on this list without obtaining a licence. But Huawei was able to easily skirt around this restriction by getting products it needed supplied by branches of US firms located outside the physical boundaries of the US.

The US came back in May this year with further restrictions aimed at cutting off Huawei's supply of semiconductors which it gets mostly from Taiwan Semiconductor Manufacturing Company. This was done through the Foreign Direct Product Rule that makes it necessary for any company — American or foreign — that sells American products or those made using American technology to require a permit before selling to Huawei. In August, these restriction were tightened further.

Due to the May 2019 restrictions, Google has been unable to sell proprietary apps such as the Google Playstore, Gmail, YouTube, Maps, Drive, and Photos to Huawei; the company has been making do with a modified build of the open source version on Android which does not have these apps.

Google applied for a waiver, but did not receive the necessary permission.

For years now, there have been reports that an anti-trust suit is nigh, but nothing has eventuated. In May 2018, US Treasury Secretary Steve Mnuchin acknowledged that the Justice Department needed to take a close look at technology companies like Google that may be monopolies.

But Google appears to have had plenty of influence in the Obama years to keep such a probe at bay. A Washington Post report in March 2017 said Google's close ties to the White House had prevented a proposed 2012 probe into the company's alleged unfair competition from going ahead.

The Reuters report said the DoJ had also been looking at Google's search advertising - the advertisements that appear under a search box if users look for a consumer item like a TV. The search company controls both the sale of the space and the software needed to make those ad sales.

Google is presently involved in a stoush with the Australian Competition and Consumer Commission over a media code that would mandate how much it should pay Australian news publishers for using their content.

Google has been hit with three fines by the European Union over activities deemed to breach EU anti-trust rules, the most recent being a €1.49 billion (A$2.43 billion) penalty for its AdSense advertising service.

In July 2018, the EU fined Google €4.3 billion for allegedly breaching anti-trust rules over its Android mobile operating system.

In June 2017, Google was fined €2.42 billion for allegedly abusing its search engine dominance to give illegal advantage to its own comparison shopping service.

The company has lodged appeals against all three fines.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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