Microsoft Embroiled in Chinese Antitrust Probe

The company's offices in China are paid a visit by the country's anti-monopoly investigators.

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Microsoft antitrust proble

Microsoft is once again the target of an antitrust investigation, this time in China.

The company's offices in four Chinese cities were raided as part of a probe by the country's State Administration for Industry and Commerce (SAIC) on July 28. Anti-monopoly investigators seized computers and documents, contracts, financial statements, emails and files, according to the SAIC.

SAIC is conducting an investigation into allegations that Microsoft is engaged in anti-competitive behavior, possibly in violation of the country's anti-monopoly laws. The SAIC claims that it was alerted to compatibility issues in Windows and Office, along with other unspecified problems, in June 2013.

The raids took place in the company's offices in Beijing, Shanghai, Guangzhou and Chengdu. Microsoft lists the Guangzhou and Chengdu sites as sales offices. The Shanghai location is home to the company's sales, marketing and support operations in the region. In Beijing, Microsoft has three addresses.

Inspectors combed through the company's departments, including Marketing and Finance. The investigation also included a vice president, other senior officials and related personnel, stated the SAIC.

China's government hinted that the raids may be just the start of an inquiry into how the Redmond, Wash.-based software company conducts business in the country. The investigation remains ongoing, according to the statement posted on the SAIC's Website.

"We aim to build products that deliver the features, security and reliability customers expect, and we will address any concerns the government may have," said a Microsoft spokesperson in a statement to eWEEK.

Meanwhile, another American tech giant has seemingly fared better navigating China's regulatory waters. IBM and Lenovo, the Chinese PC maker, have gained approval for a major acquisition.

The companies announced on Jan. 23 that Lenovo offered $2.3 billion for IBM's x86 server business. "This acquisition demonstrates our willingness to invest in businesses that can help fuel profitable growth and extend our PC Plus strategy," Lenovo Chairman and CEO Yang Yuanqing said in a statement.

The Chinese Ministry of Commerce's anti-monopoly regulators gave the deal their approval earlier this month. The U.S. Committee on Foreign Investments has yet to sign off on the deal, which is currently under close scrutiny as the interagency group examines the potential national security ramifications.

Microsoft is no stranger to antitrust probes. In 2011, the U.S. Department of Justice (DOJ) finally declared victory in its long-running antitrust case against Microsoft, more than a dozen years after the DOJ first slapped Microsoft with antitrust action for bundling Internet Explorer with Windows.

"The final judgment helped create competitive conditions that enabled new kinds of products, such as cloud computing services and mobile devices, to develop as potential platform threats to the Windows desktop operating system," said the DOJ in a statement at the time.

In Europe, Microsoft was fined $732 million after regulators said that the company failed to offer European Windows users a choice of Web browsers, a condition of a previous antitrust judgment. The company called the oversight a "technical error," but nonetheless took responsibility.

"We provided the Commission with a complete and candid assessment of the situation, and we have taken steps to strengthen our software development and other processes to help avoid this mistake—or anything similar—in the future," pledged Microsoft following the ruling.

Pedro Hernandez

Pedro Hernandez

Pedro Hernandez is a contributor to eWEEK and the IT Business Edge Network, the network for technology professionals. Previously, he served as a managing editor for the network of...