Hard questions

Regulator queries US tech giant Microsoft in monopoly case

US technology giant Microsoft Corp has been asked by the Chinese government to clarify “major issues” regarding a monopoly case, officials said on Tuesday.

The State Administration for Industry and Commerce, one of the government agencies that deals with the Anti-monopoly Law, said the charges against Microsoft were over its Windows operating system and the Office suite of programs.

On Tuesday, the SAIC asked Microsoft to clarify on some problems it had found in electronic data during investigations.

The US high-tech giant said in its response: “We are serious about complying with China’s laws and committed to addressing SAIC’s questions and concerns.”

“By seeking clarity, the SAIC has given Microsoft a chance to explain all the relevant details. The company has set up a partnership with China Electronics Technology Group Corporation (CETC), to show that they are willing to follow the government’s regulations,” said Kitty Fok, director of research firm IDC China.

Microsoft has teamed up with CETC with an eye on government orders for its Windows 10 products.

The SAIC raided four Microsoft offices in Beijing, Shanghai, Guangzhou and Chengdu in 2014, and seized internal documents and two desktop computers. It also questioned the company’s Deputy General Counsel Mary Snapp on issues related to the monopoly investigation.

The company had promised to respect Chinese law and fully cooperate with the SAIC’s investigation work.

Fok said the government made its intentions of using locally-developed operating systems abundantly clear after the investigation in 2014.

“What is interesting is that the government is asking questions after Microsoft formed a partnership with CETC. So the impact may not be as much as last year.”

Microsoft is the second foreign IT giant to face monopoly investigations in China.

Last year, Californiabased chipmaker Qualcomm Inc was investigated by the National Development and Reform Commission, another antitrust agency, for abusing its market dominance status. It was fined $1.2 billion under China’s six-year-old anti-monopoly law.

“I think like Qualcomm, it is still better to be fined than wait without an answer, and the same thing applies to Microsoft. You would rather get a result so that you can move on,” Fok said.

I think like Qualcomm, it is still better to be fined than wait without an answer ...” Kitty Fok, director of research firm IDC China