China's State Administration for Industry and Commerce (SAIC) gave Microsoft Corp. 20 days to explain the compatibility issues with Windows operating system and the Office software program.
Microsoft is just one of the 30 companies that are under investigation as China is seeking to enforce its six-year anti-trust laws. The regulator sent the notice to Microsoft Vice President David Chen.
Late July, the Chinese officials searched four Microsoft offices in China to seek information on how the tech giant bundles its Windows and Office software. Officials said they've received complaints since 2013 about compatibility issues in Microsoft's software. The agency also spoke with the senior executives and staff from the marketing and accounting departments. Two computers, copies of contracts and financial reports, emails and other files were also confiscated.
Chinese companies are complaining of Microsoft's use of verification codes for its software. This practice, allegedly, violates the country's anti-monopoly law.
The software giant defended its practices of using verification codes to prevent piracy, which is a predominant practice in China. Users with legitimate software copies are given the codes so they can encode them in updates and system support.
Duncan Clark, Chairman of BDA, a Beijing-based tech consultancy firm, explained that the sanctions on the use of verification codes are unnecessary.
"It's hard to make sense of and hard to see how Microsoft can appease," Clark told Reuters. "How does an anti-piracy measure constitute monopolistic behavior if other suppliers can also use the same technique?"
The regulators also reiterated that Microsoft has not been transparent about compatibility issues with its operating system and software programs. Microsoft denied the allegation and released a statement saying that the company is "serious about complying with China's laws and committed to addressing SAIC's questions and concerns".
Meanwhile, ZDNet reported that Microsoft CEO Satya Nadella will visit China later this month, but it's uncertain if he will meet with Chinese regulators.
