"China Suspends Antitrust Probe into Google... Focuses Regulatory Efforts on Nvidia"

"Strategic Realignment...
Signal of Flexibility in Negotiations"

The Financial Times (FT) reported on September 18 (local time) that China, which is currently engaged in trade negotiations with the United States, has suspended its antitrust investigation into the American company Google.

According to two sources, the State Administration for Market Regulation of China made this decision. However, it has been reported that Google has not yet been officially notified of the suspension of the investigation.

Reuters Yonhap News

The State Administration for Market Regulation began investigating in February, focusing on the market dominance of Google’s Android operating system and its impact on Chinese smartphone manufacturers such as Oppo and Xiaomi that use Android. This move was interpreted as a retaliatory measure against the tariff impositions by the Donald Trump administration in the United States.

The sources explained that the decision to suspend the investigation into Google reflects a strategic realignment by China, as it concentrates its regulatory efforts on Nvidia, using this as a key leverage point in the US-China trade negotiations. One source added that halting the investigation into Google could send a positive signal to the United States, indicating that China is willing to show flexibility in the negotiations.

The United States and China held the fourth round of high-level trade talks in Madrid, Spain, on September 14 and 15. On September 15, while the talks were ongoing, the State Administration for Market Regulation announced that it would conduct an additional antitrust investigation into Nvidia’s acquisition of the Israeli semiconductor company Mellanox, which had been conditionally approved in 2020. If Nvidia is found to have violated China’s antitrust laws, it could face a fine amounting to 1% to 10% of its previous year’s sales.

Additionally, the Cyberspace Administration of China (CAC) instructed domestic IT companies such as ByteDance and Alibaba to halt testing and orders for Nvidia’s new China-exclusive chip, the RTX 6000D.

Another source familiar with the matter stated, “China is letting go of one case and holding on to another,” adding, “China is narrowing the scope of its retaliation to maximize its impact.”