Microsoft is facing a deepening probe into its operations in China about allegations that it employs anti-competitive practices in its marketing and operations in the country. On Tuesday, a Chinese regulator issued the latest communication to Microsoft asking it to address "major issues" in this matter.
The Chinese regulator investigating the case is the State Administration for Industry and Commerce (SAIC). In 2014, SAIC first announced that it was pursuing investigations into whether Microsoft employs anti-competitive practices in its marketing of the Windows operating system and Microsoft Office software. The SAIC then brought in other Microsoft products also into the scope of the investigation by adding Windows Media Player and Internet Explorer (browser) to the product lines being probed. In particular, this probe is investigating whether Microsoft's software products had issues regarding compatibility between these programs and other competing software programs made and distributed by other developers.
Pursuant to this investigation, the SAIC conducted raids on Microsoft offices in Chengdu, Shanghai, Beijing and Guangzhou and seized a lot of materials, including communications, reports and other such data. It is on the basis of these actions and investigations that the SAIC has been building a case against Microsoft, according to CNN Money.
"We are serious about complying with China's laws and committed to addressing the SAIC's questions and concerns," a Microsoft spokesperson said, according to CNN Money.
Microsoft has operated in China for several years now and has made significant investment there, according to Reuters. In recent months, it has been striking agreements with a series of Chinese hardware makers, including Baidu and Xiaomi, to integrate and market products of the companies together. Microsoft has also set up an affiliate to supply its Windows operating system to the Chinese bureaucracy.
In recent years, several companies have faced similar investigations by different regulators in China. These include Mead Johnson, Danone, GlaxoSmithKline and Qualcomm. In February 2015, Qualcomm was forced to settle its antitrust investigation by paying a fine of almost one billion dollars. This is still one the highest such fines that a foreign company has had to pay in China, according to the Agence France Presse.
