Microsoft confirms China probe over possible antitrust after four offices visited

Mainland business authorities are investigating Microsoft, the US technology giant confirmed yesterday, with reports that the focus was on antitrust behaviour.

Investigators of the State Administration for Industry and Commerce yesterday made unannounced visits to Microsoft’s offices in Beijing, Shanghai, Guangzhou and Chengdu, news portal Sina reported citing a source familiar with the matter.

It was unclear why the company was being looked into, it said, though the portal ran another story quoting a source as saying the investigation might have to do with antitrust matters.

The Microsoft investigation comes just days after the mainland’s antitrust regulator said that Qualcomm, one of the world’s biggest mobile chipmakers, had a monopoly.

Microsoft China spokeswoman Joan Li confirmed in an emailed statement that the company was being investigated and said it would “actively cooperate” with the government. She did not specify what the investigation was about.

The administration could not be reached late yesterday.

In late May, the central announced it would ban government use of Windows 8, Microsoft’s latest operating system. At the time, the Xinhua reported that the ban was to ensure computer security after Microsoft ended support for its Windows XP operating system, which was widely used on the mainland.

Less than two weeks later, the state-run broadcaster CCTV aired a strongly critical programme in which experts suggested Windows 8 was being used to grab information on Chinese citizens.

A number of foreign companies have recently been the subject of official probes.

There were reports in May last year that Microsoft was being investigated by the United States Department of Justice and the Securities and Exchange Commission on accusations that the software giant’s executives in China, Italy and Romania bribed government officials in exchange for business.

The Chinese case was first disclosed to US officials in 2012 by an unnamed whistle-blower who worked for Microsoft China. The whistle-blower was allegedly directed by a Microsoft executive to pay bribes to government officials to secure business deals.

Microsoft, with the help of an external law firm, was reported to have carried out an internal probe into the accusations, but found no case of such bribery.

source: Adrian Wan, Keith Zhai and Bien Perez/South China morning post