Microsoft CEO faces deadline in China's anti-monopoly probe

PUBLISHED : Tuesday, 02 September, 2014, 4:49am
UPDATED : Tuesday, 02 September, 2014, 9:05am

Satya Nadella could face his stiffest test yet as Microsoft's chief executive when he visits the mainland later this month amid efforts by the world's largest software company to resolve its anti-monopoly issues in the country.

The State Administration for Industry and Commerce (SAIC) yesterday posted on its website a notice giving Microsoft 20 days to provide a written explanation concerning the company's operations. Microsoft was also asked to respond to compatibility and other issues with its Windows and Office software reported by mainland enterprises.

The administration said its special investigation group issued that deadline for full disclosure to a team led by Microsoft vice-president David Chen Shi during its anti-monopoly inquiry yesterday.

In July, investigators swooped on Microsoft's offices in Beijing, Shanghai, Guangzhou and Chengdu to gather documents and other data.

SAIC said at the time that Microsoft was suspected of violating the country's anti-monopoly law since last year after mainland enterprises complained about compatibility, bundling and document authentication issues with its popular software products.

In a statement released yesterday, Microsoft said: "We're serious about complying with China's laws and committed to addressing SAIC's questions and concerns."

Industry analysts expected Nadella, who was named Microsoft chief executive in February, to take the lead in clearing up the company's issues on the mainland, the world's second-biggest economy.

But Microsoft has not commented on Nadella's itinerary during his mainland trip.

"The Microsoft chief executive should work on better government relations in China," Gartner research analyst Sandy Shen said, noting the ban on the installation of the Windows 8 operating system on government-owned computers.

Charlie Dai, an analyst at Forrester Research, said: "He should show the company's commitment to the local market by ensuring mutually beneficial growth with local resellers, which include independent software vendors and systems integrators."

According to its mainland website, Microsoft has more than 3,000 full-time employees working in more than 20 branch offices across 15 provinces and big cities. Its operations include research, product development, marketing, technical support, education and training.

Keso Hong Bo, founder of mainland technology website DoNews and seasoned observer of the internet industry, said the anti-monopoly probe against Microsoft had come too late.

"Why didn't the government investigate Microsoft when Windows dominated the market? Today, more people are moving to operating systems developed by Google and Apple," he said.