Snowden affair put focus on Microsoft in China

Microsoft Corp, the subject of an anti-trust investigation, has not been fully transparent about its Windows and Office software sales, Zhang Mao, head of the State Administration for Industry and Commerce, said Tuesday in Beijing.

"Microsoft is willing to cooperate with government officials for the probe and we will reveal major results to the public," Zhang told a press briefing.

He said the probe was one of nine this year that involved the insurance, tobacco, telecoms, tourism, software and automotive industries among others. The companies included state-owned and foreign enterprises and trade associations.

Microsoft China declined to comment by Tuesday.

The SAIC, one of three anti-monopoly regulators in China, said earlier this month that Microsoft had been suspected of violating the anti-monopoly law in relation to problems with compatibility, bundling and document authentication for its Windows operating system and Office software.

The US company's web browser and media player are believed to be the target of the anti-trust probe.

In the past, Windows' bundling of its Internet browser and media player have been the focus of anti-trust cases brought by US and European authorities.

In 2001, Microsoft settled a long-running case with the US Department of Justice over whether it could bundle its flagship Internet Explorer browser with Windows.

In 2004, the European Union fined Microsoft 497 million euros (US$656 million) and ordered the company to produce a version of Windows without the Windows Media Player. The fine was later increased to nearly 1.4 billion euros.

The regulator launched its investigation after complaints Microsoft had failed to publish all the documentation required for its Windows operating system and Office suite of administrative programs.

It sent 100 officials on unannounced visits to Microsoft offices in Shanghai and three other Chinese cities last month and later interviewed Mary Snapp, the company's deputy general counsel, in Beijing.

Shanghai lawyer You Youting said that the investigation could extend beyond the media player and browser issue.

"It's possible the government hasn't been successful in finding what they're looking for," said You, a partner at Shanghai Debund Law Offices.

"But by starting with these two products, it gives them time," You added.

Microsoft has been attracting the authorities' attention since former National Security Agency worker Edward Snowden revealed its technology was used for cyber espionage.

Several other American tech firms, including the world's top mobile chip designer Qualcomm, are also facing anti-monopoly investigations in China.

The National Development and Reform Commission, another top industry regulator, met a delegation from Qualcomm which included Derek Aberle, the company's president, last Thursday.

In a statement after that meeting, the company said: "Qualcomm executives discussed with NDRC officials several topics in an effort to reach a comprehensive resolution.

We are continuing to cooperate with NDRC and cannot comment further."

Besides Microsoft and Qualcomm, a number of foreign carmakers have also been the subject of anti-trust investigations.

In July, NDRC slapped a record US$201 million fine on 12 Japanese automakers it said had engaged in price manipulation.