Microsoft Gets Thumbs Up From Regulators

Microsoft lawyers will be relieved today after the Chinese government appeared to deny reports that the company could fall foul of new anti-trust laws. The denial follows a report in a government-run newspaper, Shanghai Security News, which said officials were investigating large software companies. The report claimed local tech firms might bring legal action under laws which come into force on August 1.

The main objection seemed to be that Microsoft has used its dominance in the Chinese market to price Windows (the equivalent of US $145-290) and Microsoft Office ($580-725) so high that the two together will cost more than many standard computers. Officials were also unhappy that the price is higher than in the United States. (Source: reuters.com)

Since then, there have been mixed signals from officials. The State Intellectual Property Office (SIPO) told a French news agency that "ported earlier in Chinese-language media: "Our departments are carrying out the investigation....We will release the findings later."

However, the following day, officials from SIPO told the same agency that "We have never carried out investigations on suspected market monopoly against enterprises, and currently we do not have any plans for this type of work either." (Source: cnn.com)

Surprisingly, Microsoft welcomed the new laws. A spokesman said the company believed "efforts such as the anti-monopoly law will better safeguard interests and benefits of consumers, encourage innovation and enhance economic development."

According to one lawyer, the new law isn't yet finalized. It will likely say that firms can complain about monopolistic behaviour, but that officials don't have to act on it. He speculated that any investigation would probably be politically-motivated and done partly for the sake of public image.

It seems Microsoft is safe for the moment. However, the firm might want to keep its international lawyers on speed dial: several companies that develop software for Linux operating system are targeting China's computing market, and they'll no doubt be pressuring officials if they feel open source software isn't getting a fair shake in the market.