Microsoft antitrust probe in China: The plot thickens

Summary:Chinese media believe Microsoft was raided as a result of withdrawing support for Windows XP.

A Microsoft employee confirmed to Sina news on Monday night that anonymous sources reported Microsoft to Chinese regulators for violation of the country's anti-monopoly laws.

The employee indicated that Microsoft had no idea who made the complaint nor which specific rule the company is accused of violating.

But Sina news, citing an unnamed industry insider, said the US-based software giant's decision to withdraw support for the Windows XP operating system — which is widely used in China — was the reason for the probe.

According to an online survey initiated by Sina on Wednesday, 81 percent of respondents are in favor of an investigation into Microsoft in China, while 80 percent believe Microsoft is involved in monopoly activities in the country.

The earlier report on Monday only indicated  that investigators dropped into four of Microsoft offices in China. A Microsoft spokeswoman said the company would cooperate and was happy to answer the government’s questions.

Currently, three government departments manage antitrust-related affairs in China. The National Development and Reform Commission (NDRC) deals with issues associated with price-fixing. State Administration for Industry & Commerce (SAIC) mainly focuses on enterprises’ monopoly activities through abuse of market position, while the Commerce Department is responsible for monopoly issues arising from mergers and acquisitions.

As Microsoft is being investigated by SAIC this time, the company is likely to have been deemed to be "abusing its market position" in the country, said the Sina news report.

A legal professor noted in the report that the probe on Microsoft is expected to be fairly lengthy as investigators generally have to collect large amounts of evidence in cases of this kind.

Given that Microsoft’s PC operating system business is the company’s main strength in China, with over 90 percent of the country’s market share, market insiders believe the company’s withdrawal of support for its popular Windows XP was the cause of the probe.

In April, Microsoft announced it would no longer provide technical support for the Windows XP operating system, including system updates and security patches, leaving nearly 200 million computers vulnerable to security threats.

In an interview in April with China Central Television Station, the country’s state-owned media, some experts had already pointed out that Microsoft’s decision was “an abuse of its dominant market position”, and was in violation of China’s anti-monopoly law.

Topics: Microsoft, China, Legal

About

Cyrus Lee, writing under a pen name, is a Hong Kong-based reporter in an English-language newspaper and a correspondent for a radio station.

Contact Disclosure

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Related Stories

The best of ZDNet, delivered

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
Subscription failed.