China Investigating Microsoft for ‘Monopolistic Behavior’

The announcement, by the State Administration for Industry and Commerce, which enforces China’s antimonopoly law, confirmed reports on Monday that Microsoft was under scrutiny and said “an investigation has been established into Microsoft Corporation on suspicions of monopolistic behavior.”

The agency said it was acting on complaints from businesses that Microsoft’s Windows operating system and Office software products were packaged and sold in ways that violated China’s 2008 antimonopoly law.

Phone calls and an email to a Microsoft officer in Beijing were not answered. On Monday, after initial reports of surprise visits by officials, the company said, “We’re happy to answer the government’s questions.”

The announcement made Microsoft the latest foreign high-tech company to come under pressure from China. Officials and state-run media have accused foreign tech companies of dominating the marketplace and abetting intelligence-gathering by the United States government.

President Xi Jinping has re-emphasized longstanding demands that China reduce its reliance on foreign technology suppliers. In June he said that “only if core technologies are in our own hands can we truly hold the initiative in competition and development.”

Last week, Chinese media reported that the National Development and Reform Commission was investigating possible antitrust violations by Qualcomm, one of the world’s largest makers of the chips used in mobile devices.

The State Administration for Industry and Commerce said that on Monday nearly 100 of its officers visited Microsoft premises across China, including Beijing and Shanghai. They questioned senior managers and sales staff, copied financial records and took data from computers. They also confiscated two computers.

The administration said it was acting on complaints made last year, and after an initial inquiry “could not exclude that the aforementioned conduct by Microsoft Corporation carried suspicions of monopolistic behavior.” It also said that it wanted to question Microsoft employees who were abroad, but did not name them.