Microsoft Offices in China Raided for a Second Time

With a new round of raids that have ensnared Microsoft partner Accenture, the Chinese government takes a closer look into the software giant's dealings in the country.

Microsoft logo

Chinese government officials returned to Microsoft this week in an antitrust probe that has spread to the company's partner Accenture, a technology services and consulting firm.

On July 28, China's State Administration for Industry and Commerce (SAIC) announced that the agency's anti-monopoly investigators had seized computers, documents, emails and files from Microsoft's offices in Beijing, Shanghai, Guangzhou and Chengdu. The SAIC is looking into allegations of anti-competitive behavior by Microsoft.

The investigation was sparked by complaints made in June 2013 of compatibility issues affecting Windows and Office, among other unspecified problems.

While addressing the raids, the Redmond, Wash.-based software giant struck a cooperative, if vague, tone. In a statement to eWEEK, a Microsoft spokesperson, stated, "We aim to build products that deliver the features, security and reliability customers expect, and we will address any concerns the government may have."

The SAIC's recent actions suggest that it has not been satisfied with Microsoft's conduct during the probe.

In an Aug. 4 statement on its Website, the SAIC cautioned Microsoft to "strictly abide by Chinese laws." The agency also called upon the company to cooperate fully during the process and warned against hindering its investigation into the company.

Two days later, the SAIC revealed that its task force is casting a wider net.

On Aug. 6, the SAIC said that it had paid another round of visits to Microsoft sites in Beijing, Liaoning, Fujian and Hubei. In Dalian, officials raided the offices of Accenture, to which Microsoft outsources financial operations.

Without explicitly mentioning Microsoft, Accenture confirmed to Reuters only that it had turned over information to the SAIC that pertains to one of its clients. The investigation is ongoing, said the SAIC.

China has proven a challenging market for Microsoft, particularly following the headline-grabbing disclosures from former National Security Agency (NSA) analyst Edward Snowden. In May, China banned Windows 8 on government PCs.

Other American tech companies have been feeling the heat as well. Also in May, the Chinese government reportedly began urging banks to swap out their IBM servers for systems built by Chinese companies. Meanwhile, Chinese PC maker Lenovo is awaiting final approval from the U.S. government on its $3.2 billion bid for IBM's x86 server business.

Despite these stumbling blocks, Microsoft remains bullish on the region. On March 26, the company announced a major expansion of its Azure cloud computing platform into China by teaming with 21Vianet Group.

Takeshi Numoto, corporate vice president of Cloud and Enterprise Marketing for Microsoft, said in a statement, "Cloud computing is a big part of the future for China, and we are thrilled to play a role in bringing this future to our customers." (21Vianet Group is also IBM's cloud partner for SmartCloud Enterprise+ in China.)

China is evidently important to Microsoft's "cloud-first" strategy. Citing market data from IDC, an IT market research firm, Numoto noted that since 2012, the public cloud service market in that country has experienced a "sustained growth rate of more than 40 percent."

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...