China regulator announces anti-monopoly probe of Microsoft

China regulator announces anti-monopoly probe of Microsoft

BEIJING - A Chinese regulator is conducting an anti-monopoly investigation into Microsoft Corp over its Windows operating system, in the latest of a growing number of competition probes that have unnerved Western firms in China.

China's State Administration for Industry & Commerce (SAIC) is also investigating a Microsoft vice president and senior managers, and has made copies of the firm's financial statements and contracts, the agency said on its website on Tuesday.

It said Microsoft, which has struggled to make inroads in China due to rampant piracy, has not fully disclosed information about Windows and its Office software suite.

Microsoft is one of the biggest US companies to fall under the eye of Chinese regulators as they ramp up their oversight in an apparent attempt to protect local companies and customers.

The investigation comes as US-China business relations have been severely strained by wrangles over data privacy.

Investigators raided Microsoft offices in Beijing, Shanghai, Guangzhou and Chengdu on Monday.

The SAIC said it had obtained documents, e-mails and other data from Microsoft's computers and servers, adding that it could not complete the investigation as Microsoft had said some of its key personnel were not in China.

Microsoft has been suspected of violating China's anti-monopoly law since June last year in relation to problems with compatibility, bundling and document authentication, the statement said.

Microsoft said it complies with laws and regulations of every market where it operates. "Our business practices in China are designed to be compliant with Chinese law," a representative said in an emailed statement.

The SAIC statement said the raids were prompted by reports from other companies, without naming them.

DETAILS MURKY

But mystery surrounds the probe, with industry experts and lawyers questioning what, if any, violations Microsoft can have made in China, where the size of its business is negligible.

It is still unclear how exactly Microsoft violated China's anti-monopoly law, said Duncan Clark, chairman of Beijing-based tech consultancy BDA.

"It's ironic they can be accused of a monopoly in a mostly pirated operating system market, as they were criticised for ending support to mostly non-paid versions of Windows XP," said Clark, referring to Microsoft halting support for the 13-year-old operating system in April.

 

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