Microsoft asks Beijing to stop piracy at state-owned firms

Petroleum giant among state-owned companies accused of using illegal software, sources say

PUBLISHED : Friday, 21 September, 2012, 12:00am
UPDATED : Tuesday, 29 January, 2013, 12:34pm


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Software giant Microsoft Corp has asked China to stop the alleged use of pirated versions of its Office software by China National Petroleum Corp and three other state-owned companies, three people familiar with the situation said.

The world's biggest software company filed its complaint against CNPC, China Post Group, China Railway Construction Corp and TravelSky Technology last month to a government panel led by Vice-Premier Wang Qishan, the sources said.

Microsoft alleged that more than 40 per cent of Office and Windows server client software used by CNPC, the parent firm of China's largest company by value, was unlicensed, the people said.

A Microsoft spokesman said he did not have any information on the filing.

A Beijing-based spokesman at CNPC said the company had not heard about Microsoft's complaints. He declined to comment on whether CNPC used pirated versions of the Office software.

Xu Zhaohui, who is in charge of hardware and software at China Post, said Microsoft's allegations were "inaccurate".

The company, which delivers mail, received a complaint from Microsoft within the past month and had sent a written response, Xu said.

Microsoft's estimates "greatly exaggerated" the use of unlicensed software by China Railway Construction, the company said through a public relations representative.

"We do not rule out the possibility some subsidiary units may have used unauthorised software, but it certainly is not such a large proportion," China Railway Construction said. "The company attaches great importance to this matter, and we are holding an internal inquiry."

Calls to the TravelSky headquarters number listed on its website were not answered.

Microsoft chief executive Steve Ballmer met Wang in Beijing in May, and the vice-premier pledged to crack down on software piracy, Xinhua reported at the time.

In a speech at Peking University during the trip, Ballmer said intellectual property protection in China was "weak", making it hard to sell legitimate software.

China's illegal software market was worth almost US$9 billion last year, compared with a legal market of less than US$3 billion, according to the annual report of the Business Software Alliance released in May.

In its complaint, Microsoft alleged that almost all of TravelSky's Office software was unlicensed, while 93 per cent of China Post's and 84 per cent of China Railway Construction's came from pirated versions, the people said.

For Windows server client software, the company alleged that almost 100 per cent of China Post's, 97 per cent of China Railway Construction's and 87 per cent of TravelSky's applications were unlicensed, they said.

The allegations were based on Microsoft's own estimates and calculations, the people said.

China agreed during December 2010 meetings with US officials in Washington to take steps to counter losses from piracy for software companies.

Wang, who led that Chinese delegation, was named the head of a panel created in November last year with responsibility for ensuring the protection of intellectual property rights.