China: Government demands answers from Microsoft

The nation’s State Administration for Industry and Commerce has questioned Microsoft’s Vice President David Chen, the agency said Monday. The SAIC’s actions follow recent complaints filed by rival companies in China against Microsoft’s requirement of verification codes for its operating system and its Office products.

That use of verification codes “may have violated China’s anti-monopoly law,” state media said Monday.

But some antitrust experts don’t buy it. The head of Beijing-based technology consultancy BDA, Duncan Clark, told reporters that applying anti-monopoly law to Microsoft’s use of verification codes is questionable. “How does an anti-piracy measure constitute monopolistic behavior if other suppliers can also use the same technique?” he asked.

The use of verification codes, reports say, is a common technique used by technology companies to combat piracy of their products.

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Microsoft said it is fully cooperating with the investigation.

Microsoft is just one of a slew of foreign companies that have been targeted by Chinese officials in recent months. It’s a trend some competition experts find troubling.

A recent editorial on the topic published in Caixin Online highlights the worries of investors that China could be unfairly targeting foreign companies for the benefit of domestic competitors. Further, some experts say, as claims of bias within Chinese competition regulators increase, officials are facing the threat of undermined credibility.

Some are now calling on Chinese regulators, including the SAIC, National Development and Reform Commission, and the Ministry of Commerce to address the claims of bias.

Full content: Reuters

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