Microsoft antitrust probe in China: The plot thickens

Microsoft antitrust probe in China: The plot thickens

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

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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, Legal, China, Windows XP and the Future of the Desktop

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26 comments
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  • Seriously

    Seriously people this is a 14 year old operating system. If you are still using it then you shouldn't be using a computer, period!

    Stop complaining, Get over it and go use Linux if you have a problem with Microsoft.
    bi0xide
    • People always talk about this as though people are

      stealing a freebie off a 14 year old clunker computer.

      They aren't.

      XP machines were sold as recently as five years ago - a VERY different story from the usual narrative.
      Mac_PC_FenceSitter
      • I agree, But...

        People knew Windows XP was old 5 years ago, Windows 7 has been available since mid 2009.

        There is no excuse for running Windows XP, regardless of how long you have had it.
        bi0xide
        • You assume everyone knows what you know

          Not everyone knows, except a few techs and there family.

          Recently worked on a windows XP home edition with FBI ransomeware that a grandmother has for her grand kids to use. I explained what might happen if someone uses. O well, I don't have the money right now to get a new computer. I don't use my grand kids use.
          daikon
          • I agree

            Money is a concern, and people can continue running any OS they choose, but to have a monopoly investigation because you discontinue support is silly as well.
            schultzycom
          • @daikon

            I sincerely hope that you hardened the grandmother's Windows XP-based PC. If so, what steps did you take?
            Rabid Howler Monkey
      • People always talk about this as though people are

        prohibited from using their copies of Windows XP.

        They aren't.
        Sacr
      • Ok

        But how long does Apple support Their Desktop OS? Really a five year old computer can run Windows 7, and Windows 8. Windows XP should of been killed off years ago, but Vista gave it some life. I do not see how discontinuing support for an old OS is cause for a monopoly investigation.
        schultzycom
    • Microsoft antitrust probe in China: The plot thickens

      if you just sunk a big chunk of your money in a product, you expect it to at least be useful until you get your perceived roi. xp may be obsolete here in the us, but in china it was only recently that chinese users were forced to get legit copies of whatever was in their pcs, a big chunk of which are xps. so, for microsoft to stop supporting the product that they just got their revenue stream would not set well with their customers. the best option for microsoft not alienating a big chunk of their future market, is to dole out a deal sweetener to these consumers ...
      kc63092@...
      • Lets apply that logic to all operating systems then

        Does Apple still support iOS and OSx versions from five years ago, no.
        Does Google still support Android versions from five years ago, no.

        Should those companies expect to be raided also?


        Lets be honest here. The overwhelming majority of copies of windows XP in china are pirated. It is absurd that China wants special treatment after they allowed piracy to get so pout of hand. It is ludicrous to accuse a company of being s monopoly, because the majority of the country has stolen their product.
        Emacho
        • In addition, Google very recently committed to supporting Chrome OS

          on Chromebooks and Chromeboxes for a *minimum* of five (5) years. I'd be surprised if this ever gets stretched out to ten (10) years.
          Rabid Howler Monkey
      • hmm.

        They can still use XP. ITs not like it broke the day after support ended.
        schultzycom
  • So China got caught with it's pants down

    living high on the hog with great growth, spending on everything except the software they knew was losing support, and now that the money's not rolling in like it used to, NOW they react?

    Funny, nothing I see that was made in China comes with an unlimited, lifetime support.
    William.Farrel
    • You have a question mark there

      “living high on the hog with great growth, spending on everything except the software they knew was losing support, and now that the money's not rolling in like it used to, NOW they react?”

      What is the question.....

      I
      daikon
      • How Many Legal?

        Of the 90% of computers in China that use Windows, I wonder what percentage are legal copies? I also wonder what percentage of government computer use legal copies? Maybe they are covered by a single license?
        MichaelInMA
  • Pull out of China!!!

    Microsoft should cease doing any business in and with China! China has already banned Windows 8, they continue to use pirated Microsoft software and China unlawfully raided Microsoft's offices. If this raid was over Windows XP, China is then just pathetic! Windows XP was released in the year 2001, its old software that was designed to work on PCs that had as low as 64MB of ram.
    Pollo Pazzo
    • China bans use of Microsoft's Windows 8 on government computers

      Note: government computers
      daikon
    • Microsoft antitrust probe in China: The plot thickens

      "Pull out of China!!!"
      even apple realized that china is their future growth market, i wonder where you got your logic of pulling out of the chinese market ... perhaps, you can start a consulting business and start giving financial advise to the multinationals from all over the world that wanted to get a piece of the chinese market. just saying ...
      kc63092@...
      • Google ditched China

        It's an option for any company. If Microsoft is not currently weighing the option of leaving China along with its potential impacts, it's a very big mistake.
        Rabid Howler Monkey
  • Of course state run media says they violated market rules

    They just violated the wrong ones... like not sharing their Windows 8 code base so the Chinese could figure out how to crack the activation mechanism. If they are that hung up over expiring Windows XP support, they need to switch over to Linux. I wonder what is stopping them from going more open-source? Maybe the government doesn't want to share state secrets with the people and its too easy to make Linux anonymous?
    archan127