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Microsoft Corporation (NASDAQ: MSFT)’s Monopolistic Behavior In China

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By on Technology & Software

On Tuesday, the Chinese government disclosed in a statement that Microsoft Corporation (NASDAQ: MSFT) is currently undergoing investigation for the possible violation of China’s antimonopoly laws. It was confirmed that officials had conducted surprise visits to the company’s offices across the country.

The entity of the Chinese government that handles enforcing antimonopoly regulations is the State Administration for Industry and Commerce. It confirmed that Microsoft was indeed under investigation for suspicions of monopolistic behavior.

The Chinese government agency revealed that it took action after receiving multiple complaints from businesses that Microsoft’s operating system and Microsoft Office products were bundled and retailed in multiple ways that went against China’s antimonopoly law passed in 2008.

This announcement marks Microsoft as the most recent foreign technology company to receive pressure from China. Both government run media and government officials have thrown accusations at foreign technology companies for unfairly dominating the marketplace and helping the United States government gather data on its users.

China’s president, Xi Jinping, has emphasized again the necessity for China to lessen its dependence on foreign technology suppliers. Last month in June, the president stated that China will only be able to hold the initiative in development and competition if China has the core technologies in its own hands.

Last week, Qualcomm Inc (NASDAQ: QCOM) also came under attack for allegedly engaging in monopolistic behavior and collecting payments regarding their intellectual property. Qualcomm is the largest manufacturer of the chips that are used in mobile phones and devices. Chinese media reported that the National Development and Reform Commission was in the process of investigating the possibility of Qualcomm violating antitrust laws.

The State Administration for Industry and Commerce of China revealed that approximately 100 of its officers visited Microsoft buildings all across China, including Shanghai and Beijing. Senior managers and sales staff were questioned, financial records were copied, and data was taken from computers. Two computers were also seized.

Analyst Megan Hughes says that this investigation could be more than just about antitrust laws violations. She states that relations between the technology company and China had been unfriendly since May, citing an example when the Chinese government purposely left Microsoft out of a government contract. At the time, Chinese state media reported the decision was due to concerns about internet safety.

It seems that this recent antitrust violation attack and subsequent investigation is a more intensified manifestation of what the public saw in May.

 

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