According to state-run Xinhua news agency, a Chinese team led by the State Administration for Industry & Commerce (SAIC) has demanded a written explanation from Microsoft regarding the company’s purported monopoly on the compatibility of its Office and Windows in China. Microsoft Vice President David Chen and other staff members have been given a 20-day deadline to respond to the anti-trust regulation queries.
Having investigated complaints in June 2013, which indicated that Microsoft may have violated the Chinese anti-monopoly laws by using verification codes and tie-in sales in both the Office productivity suite and Windows operating system, the SAIC found some questionable issues that necessitated the querying of Chen and his team on Monday.
In a report released by the Xinhua, some of the issues found by the SAIC included the allegation that Microsoft didn’t fully disclose relevant information to public about its products, as is required by China’s laws. As a result, many enterprises witnessed compatibility issues that could have been easily avoided, had all information been duly disclosed.
Responding to these allegations and the 20-day deadline given to them, Microsoft said that it will “actively answer” all the questions raised to them and facilitate all the necessary investigations in regards to the anti-monopoly charges.
To further stress on their commitment towards complying with China’s laws and responding to the probe, a statement from Microsoft sent to the Global Times reads, “We’re serious about complying with China’s laws and committed to addressing SAIC’s questions and concerns”.
The probe and demand for answers from Microsoft is considered by many enterprises as a stern warning to large companies that, seemingly, use their influence to abuse the market.
According to China’s anti-monopoly laws, Microsoft may face fines ranging between 1 and 10 percent of their annual revenues, if found guilty. Based on the increasing challenges in the domestic Chinese market from companies like Tencent, especially in the instant messaging sector, such a fine could prove very costly to Microsoft.
However, Dong Zhengwei, a lawyer with Beijing Liang Gao Law Firm, told the Global Times that, even though “Microsoft’s behavior has hurt the growth of homegrown software developers as well as Chinese consumers’ interests for long”, there is a high likelihood that “Microsoft will receive a scaled-down punishment” due to their willingness to cooperate in the investigations.
Whether Microsoft will receive a hefty punishment if found guilty or they are cleared of the charges is anyone’s guess. However, what remains for certain is that China and the world at large, will be waiting with bated breath to hear Microsoft’s response 20 days from now.