China gives Microsoft 20 days to provide explanation in anti-trust probe
BEIJING (Reuters) - A Chinese anti-trust regulator said on Monday it has given Microsoft Corp (MSFT.O: Quote) 20 days to reply to queries on the compatibility of its Windows operating system and Office software suite amid a probe into the world's largest software company.
The State Administration for Industry and Commerce (SAIC) questioned Microsoft Vice President David Chen and gave the company a deadline to make an explanation, the agency said in a short statement on its website.
Microsoft is one of at least 30 foreign companies that have come under scrutiny by China's anti-monopoly regulators as the government seeks to enforce its six-year old antitrust law. Critics say the law is being used to unfairly target overseas businesses, a charge the regulators deny.
According to a state media report on Monday, Microsoft's use of verification codes also spurred complaints from Chinese companies. Their use "may have violated China's anti-monopoly law", the official Xinhua news agency said on Monday.
Verification codes are typically used by software companies as an anti-piracy mechanism. They are provided with legitimate copies of software and can be entered to entitle customers to updates and support from the manufacturer.
Microsoft has long suffered from piracy of its software within China. Former Chief Executive Steve Ballmer told employees in Beijing that the company made less revenue in China than it did in the Netherlands.
Complaints about verification codes potentially violating anti-monopoly laws are Kafka-esque, said Duncan Clark, chairman of Beijing-based tech consultancy BDA.
"It's hard to make sense of and hard to see how Microsoft can appease," said Clark. "How does an anti-piracy measure constitute monopolistic behavior if other suppliers can also use the same technique?"
SAIC also repeated that it suspected the company has not fully disclosed issues relating to the compatibility of the software and the operating system. Continued...