Anti-Monopoly Law Put to the Test

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Microsoft (the “small flaccid” one) is reported to be in the firing line of China’s antitrust investigators under the Anti-Monopoly Law, which we reported on here (see more background on China Law Blog here). ChannelWeb reports:

    “China state media on Wednesday reported that the Chinese government’s State Intellectual Property Office has launched antitrust investigations against Microsoft and several other software vendors for allegedly charging more for their products in China than in other countries.

    According to AFP, a source quoted by China’s Shanghai Securities News said a package consisting of one copy of Windows and one copy of Office can cost more than $1,000. The Chinese government passed a law last year specifically designed to address the high cost of genuine software, and it’s possible that lawsuits against Microsoft and other vendors could follow after the law takes effect August 1, the source said.”

Microsoft knows a thing or two about anti-trust investigations (so will no doubt be prepared). They may however wish that the Intellectual Property Office spent more time on protecting them against software pirates…

There is no doubt Microsoft is an important player (and – perhaps, at least in part, due to rampant software piracy of the past – the dominant one). It also has deep roots in China, and has done a good job of integrating itself into communities on the one hand (e.g. by supporting rural education programmes) and gaining commercial advantage (e.g. by getting agreement from hardware manufacturers to pre-install authentic software).

It will be interesting to see how they (and their lawyers and government relations advisors) deal with this investigation. But whatever the outcome, it seems that the age of the anti-trust investigation has arrived in China. How it will be applied (with regard to foreign vs. domestic firms) remains to be seen.

Indeed, China Law Blog suggests that we may have to wait longer than the initial reports suggest:

    “It appears these reports may be false. Microsoft has stated it is unaware of any such investigation and the PRC State IP Office has issued a statement to the effect that it was not conducting any investigation and such reports were “seriously untrue.””

The well thought-out reasoning behind this follows on their post “China Investigating Microsoft For Antitrust Violations. We Don’t Think So.”

These guys know their stuff, and their views have weight. But, whatever the outcome here, the issue is one that will surface somewhere, sometime (in the not-too-distant future). Best be prepared!

See news sources:

China Trains Antitrust Crosshairs On Microsoft
CRN – Manhasset,NY,USA
China state media on Wednesday reported that the Chinese government’s State Intellectual Property Office has launched antitrust investigations against …

Microsoft Partners in Learning
Microsoft will build 100 IT classrooms in China (mainly in rural and remote … The IT classrooms in Accessorial Experimental Middle School of Beijing …

Microsoft, Chinese PC maker sign deal to pre-install software in …
BEIJING: Microsoft Corp. and China’s No. 2 personal computer maker signed an … A Chinese school, shored up by its principal, survived where others fell …

Updated 19/6/08

One Response to “Anti-Monopoly Law Put to the Test”

  1. Administrator Says:

    News update (Forbes):

    “China’s intellectual property bureau issued a formal denial Friday of press reports that asserted it was conducting an anti-monopoly probe of Microsoft.

    But it is likely only a temporary reprieve for the global software giant. A new anti-monopoly law will take effect Aug. 1 that has a loosely defined and seemingly low threshold for the government to initiate an official investigation: upon receipt of a complaint from an institution or a lone individual.”

    http://www.forbes.com/markets/2008/06/20/china-microsoft-monopoly-markets-equity-cx_jc_0620markets2.html

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