SAIC ‘likely investigating abuse of market power’

Four Microsoft Corp offices in China have been visited by Chinese authorities, the company confirmed on Monday, but declined to reveal any details.

The State Administration for Industry and Commerce (SAIC) has paid visits to the company's offices in Beijing, Shanghai, Guangzhou and Chengdu, a Microsoft spokesperson confirmed with the Global Times on Monday, but said the reasons for the inspection are still unclear.

"We are happy to answer the government's questions," read a Microsoft statement sent to the Global Times.

Files on computers of some Microsoft managers in Guangzhou have been copied by SAIC, a source close to the matter who requested anonymity told the Global Times.

The investigation is probably on possible monopolistic behaviors, said the source.

SAIC, the National Development and Reform Commission (NDRC) and the Ministry of Commerce are China's three departments that investigate monopolistic behavior. Law experts said that in the case of Microsoft, SAIC is very likely investigating into its possible abuse of market power, such as bundle sales.

"It [the investigation into Microsoft] is expected and I'm not surprised," said Xue Kepeng, a professor of civil and economic law at the China University of Political Science and Law, adding that Microsoft has been accused of such violations in other countries.

In March 2013, the EU fined Microsoft 561 million euros ($778 million) for failing to offer personal computer users a choice of Internet browsers when they install the Windows operating system.

In 2005, Microsoft was fined 33 billion won ($32.15 million) by South Korea's anti-trust regulator for violations of fair trade regulations and ordered Microsoft to unbundle Windows Media Service from the Windows Server operating system.

Xue noted that such monopolistic behavior could do great harm to consumer rights and other players in the market. "The government should never hold back in fighting monopoly," he said.

Chinese authorities have stepped up efforts to crack down on irregularities among a wide range of international firms, such as the IT industry, the pharmaceutical sector and the auto industry.

For example, US chipmaker Qualcomm Inc is currently undergoing an NDRC anti-trust investigation.

Following an NDRC pricing monopoly investigation, major auto brands such as Jaguar Land Rover and Audi have recently announced cuts of whole car and auto parts prices.

Experts said that Microsoft may face a big fine in China if any monopolistic behaviors are proved.

"Inspections on foreign firms are on a regular basis at present, and the inspections could help to improve a foreign company's services in China," said Han Meng, a research fellow with the Institute of Economics at the Chinese Academy of Social Sciences.

Han noted that China has offered a comparatively "loose" environment to foreign firms in the past years, which has caused many problems.

This year has been tough for Microsoft in China. In May, central government departments were banned from installing Windows 8, the company's latest operating system, on new computers.