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Microsoft

Mainland China authorities speed up Microsoft investigations over alleged monopoly

PUBLISHED : Saturday, 12 March, 2016, 5:27pm
UPDATED : Wednesday, 16 March, 2016, 2:00pm

Chinese authorities reveal they are speeding up the investigation into Microsoft over allegations of monopoly, mainland media reported on Friday.

The 21st Century Business Herald reported that the State Administration for Industry and Commerce (SAIC) disclosed that the investigation raised major questions at Microsoft’s operations after analysing seized digital data and would reveal related evidence later to the public

The SAIC seized a total of 4TB (terabyte) of data from two raids of four Microsoft offices in mainland China last year, Yang Jie, a senior official of SAIC’s Anti-monopoly and Anti-unfair Competition Enforcement Bureau was reported as saying at an internal meeting earlier this week.

It’s the first time authorities have divulged details of the latest twist in their anti-trust investigation into Microsoft, seven months after raids were carried out on Microsoft’s offices in Beijing, Liaoning, Hubei, and Fujian in July. Investigators then visited Accenture’s office in Dalian, requesting documents related to work that Microsoft outsourced to the global technology consultancy.

During the raids, more than 200 SAIC officials entered the Microsoft offices, questioning executives, copying contracts and records and downloading data from the company’s servers, which included email and other internal communications.

At a SAIC internal meeting earlier this week, Ni Guangnan, a scholar at Chinese Academy of Engineering, a state think tank researching internet security, called for authorities to expand anti-monopoly investigations beyond Microsoft and into other Chinese-foreign joint ventures such as Cisco, EMC IBM and HP.

“Huawei’s acquisition of 3Leaf, a US tech company worth US$2 million, was under investigation and finally banned by the American authorities,”Ni was quoted saying in the 21st Century Business Herald.

Huawei bought certain 3Leaf assets for US$2 million in May 2010 but did not file until November with the Committee on Foreign Investment in the United States (CFIUS), which reviews deals for possible national security implications.

Huawei gave up the acquisition in February 2011, bowing to pressure from a US government panel that had suggested it should divest the assets.

China-US tensions over technology trade ran high this week as Washington placed sanctions on ZTE over Iran ties.

The sanction effective as of Tuesday restricts access of China’s largest listed telecoms manufacturer to American components. Washington alleges that ZTE had improperly exported US technology to Iran.

In reaction, Chinese Foreign Minister Wang Yi lambasted the American government’s decision as the wrong way to handle the conflicts in economy and trade between the two countries.

READ MORE: China’s ZTE sees supply chain in limbo as talks with US on export curbs over Iran continue

“This approach will only hurt others without necessarily benefiting oneself,” he said at a news conference.

Microsoft’s difficulties in mainland began in 2013 when Chinese authorities suspected the company of violating China’s anti-monopoly law with its Windows and Office software. The anti-trust regulator’s concerned focused on Microsoft products’ failure to align with the country’s rules on compatibility and document authentication, effectively forcing Chinese consumers to use Microsoft products where they might choose otherwise.

The current Microsoft investigation comes amidst a spate of anti-trust probes against foreign firms in China, including mobile chip maker Qualcomm Inc (QCOM.O) and Mercedes-Benz.