Microsoft given a deadline by Chinese government to respond to antitrust questions

In late July, Microsoft saw at least four of its offices in China get raided by government personnel, confiscating documents and computer hardware in what would later be confirmed to be part of an antitrust investigation.

The details of the investigation are still a little blurry, and for now it looks like the items of interest are “Windows and Internet Explorer,” quite the broad brush with which to paint a picture, and a song that Microsoft has heard before.

China’s State Administration for Industry and Commerce (SAIC) noted that its investigation was actually bigger, including Microsoft Office. SAIC also stated that Microsoft was not being “fully transparent” with its sales in China and sent a formal inquiry to Microsoft Vice President Chen Shi (aka David Chen). Microsoft has 20 days to provide a written response. Microsoft has stated from the beginning that it would “actively cooperate” with the investigation.

One of the complaints against Microsoft relates to the company’s use of verification codes which are utilized as an anti-piracy measure. Software piracy has been an ongoing problem for companies like Microsoft. Steve Ballmer once told China-based employees that Microsoft made less revenue in China than it did in the Netherlands. If you cannot draw a connection between verification codes and monopolistic behavior, you are not alone, “How does an anti-piracy measure constitute monopolistic behavior if other suppliers can also use the same technique?” asked Duncan Clark with BDA, a Beijing based tech-consultant.

The raids and subsequent investigation into Microsoft (along with 30 other foreign companies) were the latest actions in what many are seeing as protectionist measures being taken by China to shore up its own businesses. It recently stated that Google’s control over Android gives it unfair influence in China’s smartphone market and that Qualcomm has a monopoly in the microprocessor segment. The Chinese government has also blocked all government agencies from upgrading to Windows 8. Satya Nadella will be making a trip to China later this month.

All that activity is coupled with the Chinese government initiative called the OS Development Alliance, which is building its own operating system solely to compete with Apple, Google, and Microsoft, on the desktop, and in mobile. That platform is expected to make its debut in October.

sources: Reuters via Neowin and WPCentral