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Microsoft Faces an Antitrust Investigation

08-26 16:19 Caijing Magazine

The NDRC has accepted the petition of a Chinese lawyer calling for an antitrust investigation into Microsoft’s business practices.

By staff reporter Zhang Boling

Microsoft has become the first target of a China’s brand new anti-monopoly law.

On July 31, one day before the new anti-monopoly law went into affect – the first of its kind for China – came into effect, lawyer Dong Zhengwei formally petitioned the Ministry of Commerce (MOC), the State Administration of Industry and Commerce (SAIC), and the National Development and Reform Commission (NDRC) to open an antitrust investigation into Microsoft.

Dong alleged that Microsoft has used its 70 percent market share to manipulate software prices in China. He proposed a US$ 1 billion fine on the company.

On August 21, Dong received a formal notice from the MOC stating that antitrust investigations should be conducted by the NDRC and SAIC. In the same day, the NDRC formally notified Dong that his petition against Microsoft had been accepted and would be handled by the NDRC's price monitoring department.

An official from the drafting committee that wrote the anti-monopoly law told Caijing that Microsoft will face a punishment from NDRC, SAIC and MOC if the company's alleged monopolistic activities are verified by the investigation. Microsoft will have the right to appeal if it is found to be in violation.

According to Dong, Microsoft has breached several articles of the new anti-monopoly law, including hindering market competition and unfair business practices. Dong said the company’s overwhelming dominance of the market has impeded fair competition among domestic software enterprises and violated the interests of computer users.

The official from the drafting committee said that monopolistic activities appear to exist in Microsoft's operating system and office software businesses.

Microsoft has faced a series of anti-trust investigations in the European Union during the past decade and has been fined for about US$ 613 million in 2004 by the European Commission.

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