China confirms Microsoft under investigation for breach of antitrust regulations

PUBLISHED : Tuesday, 29 July, 2014, 9:11pm
UPDATED : Tuesday, 29 July, 2014, 10:14pm

Microsoft, the US technology giant, is under investigation in China for allegedly breaching antitrust regulations, the country’s market regulator confirmed on Tuesday.

Initial investigations launched in June last year were unable to dispel suspicions that the company had broken trading rules and a further probe has been launched, a statement from the State Administration for Industry and Commerce said.

Microsoft revealed on Monday it was at the centre of a government investigation, but declined to give details.

The market regulator’s statement confirmed media reports that about 100 law enforcement officers had visited the company’s offices in Beijing, Shanghai, Guangzhou and Chengdu on Monday to gather evidence.

Microsoft staff including a vice president, senior management and people working in the marketing and finance departments were questioned.

Law enforcement officers made copies of contracts and financial reports and took away internal documents and emails stored on the offices’ computers and servers. Two computers were seized.

Lawyers representing the company were present during yesterday’s operation, the statement said.

The officials did not finish their investigations because some key staff at the firm were away.

“The unannounced investigation has not completed examining all items because Microsoft said the main targets of the investigation were not in the country, in Beijing, or could not be reached,” the statement said.

The regulator has asked them to report to its offices “as quickly as possible” for questioning.

The government department said it received tip-offs from other companies in June last year complaining about Microsoft and that it had not made public “relevant information” about its Windows operating system and Office software.

It launched an investigation at the time and met Microsoft staff and relevant companies.

The regulator is in charge of market supervision to ensure there are no monopolies or unfair trading practices and also often takes the lead in bribery and corruption investigations and allegations of intellectual property rights abuses.

Microsoft said in an earlier statement before the market regulator’s comments: “We aim to build products that deliver the features, security and reliability customers expect and we will address any concerns the government may have.”

A Microsoft spokeswoman declined to comment further.

The investigation comes after the central government said in May that it would ban officials using Windows 8, Microsoft’s latest operating system.

Xinhua reported at the time that the move was to ensure computer security after Microsoft ended support for its Windows XP operating system, which was widely used on the mainland.

The state-run broadcaster CCTV later aired a programme in which experts suggested Windows 8 could be used to grab information about Chinese citizens using the software.

The National Development and Reform Commission, another of the mainland antitrust regulators, announced details last week of its investigation into US-based Qualcomm, one of the world’s biggest mobile chipmakers, ruling that it had an unfair monopoly.