[September 02, 2014]
BEIJING (Reuters) - A Chinese anti-trust
regulator said on Monday it has given Microsoft Corp 20
days to reply to queries on the compatibility of its
Windows operating system and Office software suite amid
a probe into the world's largest software company.
The State Administration for Industry and Commerce (SAIC) questioned
Microsoft Vice President David Chen and gave the company a deadline
to make an explanation, the agency said in a short statement on its
website.
Microsoft is one of at least 30 foreign companies that have come
under scrutiny by China's anti-monopoly regulators as the government
seeks to enforce its six-year old antitrust law. Critics say the law
is being used to unfairly target overseas businesses, a charge the
regulators deny.
According to a state media report on Monday, Microsoft's use of
verification codes also spurred complaints from Chinese companies.
Their use "may have violated China's anti-monopoly law", the
official Xinhua news agency said on Monday.
Verification codes are typically used by software companies as an
anti-piracy mechanism. They are provided with legitimate copies of
software and can be entered to entitle customers to updates and
support from the manufacturer.
Microsoft has long suffered from piracy of its software within
China. Former Chief Executive Steve Ballmer told employees in
Beijing that the company made less revenue in China than it did in
the Netherlands.
Complaints about verification codes potentially violating
anti-monopoly laws are Kafka-esque, said Duncan Clark, chairman of
Beijing-based tech consultancy BDA.
"It's hard to make sense of and hard to see how Microsoft can
appease," said Clark. "How does an anti-piracy measure constitute
monopolistic behavior if other suppliers can also use the same
technique?"
SAIC also repeated that it suspected the company has not fully
disclosed issues relating to the compatibility of the software and
the operating system.
"(A) special investigation team conducted an anti-monopoly
investigation inquiry with Microsoft Vice President Chen Shi (David
Chen), and required that Microsoft make a written explanation within
20 days," the SAIC said in a statement on its website.
In a statement, Microsoft said it was "serious about complying with
China's laws and committed to addressing SAIC's questions and
concerns".
Last month, a delegation from chipmaker Qualcomm Inc, led by company
President Derek Aberle, met officials at the National Development
and Reform Commission (NDRC) as part of that regulator's
investigation of the San Diego-based firm.
NDRC said earlier this year that the U.S. chipmaker is suspected of
overcharging and abusing its market position in wireless
communication standards.
Microsoft's Nadella is expected to make his first visit to China as
chief executive later this month.
(Reporting by Michael Martina and Matthew Miller; Additional
reporting by Paul Carsten; Editing by Miral Fahmy)
