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China is dropping an antitrust probe into Google, as Beijing and Washington step up negotiations over TikTok, Nvidia and trade at a time of heightened tensions between the superpowers.
The State Administration for Market Regulation has decided to terminate its competition investigation against Google, a status known as “zhongzhi” in Chinese, said two people briefed on the decision.
The Google investigation, which was formally opened in February, centred on the dominance of the US group’s Android operating system and its impact on Chinese phonemakers, such as Oppo and Xiaomi, that use the software.
The decision signals a tactical recalibration by Beijing, which is now concentrating its regulatory firepower on Nvidia, the world’s most valuable chipmaker, as a point of leverage in US-China trade talks, according to the two people.
At the same time, dropping the Google investigation sends a positive signal to Washington that Beijing can be flexible in the negotiations, said one of the people.
“Drop one case but seize the other,” said the other person familiar with the matter. “China is trying to narrow its retaliatory targets to make them more potent.”
The US and China held three days of trade negotiations in Madrid this week on tariffs, export controls and the divestment of TikTok, following three previous rounds of talks in Geneva, London and Stockholm. US President Donald Trump is expected to finalise a TikTok deal when he speaks to China’s President Xi Jinping on Friday.
Google has not been formally notified of the decision to drop the probe, said two people familiar with the situation.
Earlier this week, SAMR said Nvidia had violated the country’s antitrust law when it acquired Mellanox Technologies, an Israeli-US supplier of networking products. Beijing conditionally approved the deal in 2020.
If Nvidia is found to be in violation of China’s anti-monopoly law, the company could be fined between 1 per cent and 10 per cent of its previous year’s sales.
China’s internet regulator this week also banned the country’s biggest technology companies from buying Nvidia’s artificial intelligence chips. The Cyberspace Administration of China told companies including ByteDance and Alibaba to end testing and orders of the RTX Pro 6000D, Nvidia’s tailor-made product for the country
China opened antitrust investigations into Google and Nvidia at the start of the year, following Trump’s inauguration and his introduction of steep tariffs against Chinese goods.
While Google’s search engine is blocked in China, along with most of its parent company Alphabet’s businesses, the US company profits from Chinese companies advertising abroad.
The company has an extensive sales operation in the country, selling cloud services and advertising to Chinese companies that target overseas markets, such as ecommerce platform Temu.
SAMR and China’s State Council did not immediately respond to requests for comment. Google declined to comment.
Additional reporting by Stephen Morris in San Francisco
