China Tells Microsoft Not to Interfere With Antitrust Inquir
Source: DAN LEVIN
In another sign that China is aiming at Microsoft, the government warned the company on Monday not to interfere with its antitrust investigation, days after officials conducted surprise raids on four of the software firm’s offices across the country.
The harsh warning, using terminology rarely seen in commercial cases and normally reserved for China’s most challenging political nemeses, like Japan and the Dalai Lama, signals how seriously Beijing is taking the inquiry at a time of rising tensions between China and the United States over spying and economic issues. The State Administration for Industry and Commerce issued a statement on its website “officially warning” Microsoft to obey Chinese law and “not to interfere with or hinder the investigation in any way.”
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China has long maintained that the country must wean itself off foreign technology suppliers in order to strengthen its domestic industry and better protect its secrets from foreign governments. Also on Monday, Chinese regulators questioned Microsoft’s deputy general counsel, Mary Snapp.
Last week, the government agency announced that it was investigating Microsoft in response to complaints over the company’s use of bundling and verification codes in its Windows operating system and Office software, as well as for failing to disclose information about its products.
According to the state news agency Xinhua, inspectors made copies of financial statements and seized documents and other data from confiscated computers and servers. A number of Microsoft employees could not be reached or are not in the country, leading to official worries that the agency may not be able to complete its investigation.
In recent months, the state media has accused Microsoft of “abusing its dominant market position” by ending support in April of its XP operating system, which is used by 200 million people in China. The next month, Microsoft’s Windows 8 operating system was prohibited from being installed on computers used by the central government, citing fears that they could be hacked by the United States. The company has denied any wrongdoing.
“Our business practices in China are designed to be compliant with Chinese law,” it said in a statement.
The Chinese government has been fond of using a 2008 antimonopoly law against foreign companies. In July, state media reported that a regulatory agency that deals with price fixing, the National Development and Reform Commission, was investigating Qualcomm, a maker of mobile device chips, for possible antitrust violations and overcharging Chinese customers.
The Microsoft case is the biggest and most complicated antitrust case ever to be pursued by the state administration since the law was passed, said Sheng Jiemin, a professor at Peking University Law School who was part of the expert committee that crafted the law. Describing Microsoft as “the symbol of American high-tech industry,” Mr. Sheng said Monday’s warning ― coming so soon after the investigation’s official announcement ― was partly directed at Washington.
“The S.A.I.C. does not want the U.S. government to intercede on Microsoft’s behalf,” he said.
The company should also take heed, he noted. “If Microsoft cooperates fully with this investigation,” he said, “we ultimately may not see such a harsh punishment.”
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