updated 10:19 am EDT, Tue July 29, 2014
Investigation centers on Windows operating system dominant position
Following yesterday's raid on Microsoft offices in China, China's State Administration for Industry & Commerce (SAIC) has officially launched an anti-monopoly investigation into the company's ubiquitous Windows operating system. SAIC claims to have data backing up its investigation from the raids, but says that it cannot complete the investigation until some Microsoft executives come to China.
Microsoft issued a brief statement about the raids, saying that it was "happy to answer the government's questions" about business practices. A law firm has already been employed by the software giant. If found guilty, the company may be fined up to 10 percent of its revenue in China.
How much business the company does in China is in some question. Piracy in the country is rampant, and ex-CEO Steve Ballmer once claimed in a 1.4 billion-strong market, Microsoft earns less revenue in China than the Netherlands.
"Microsoft really has a dominant market position. People rely on it very much and its market share is very high, so this would likely lead to an abuse of its dominant market position," said Zhan Hao, a Beijing-based partner at Anjie Law Firm. "Alternatively, Microsoft could (through its market position) restrict competition for other business and competitors."