China

UPDATE: Microsoft $MSFT May Face Huge Penalty Over Alleged Monopoly

This article was originally published on July 29, 2014 at 10:57 pm EST

Summary:

  • The State Administration for Industry and Commerce (SAIC) has confirmed that it has been investigating Microsoft (US: MSFT), as reported by Chinanews.com.
  • The regulator alleges that Microsoft has been tying other products to the sales of Windows and Office which violates China’s laws.

Why It Matters:

  • The article suggests that Microsoft ceased supporting its Windows XP operating system this year which put 200 million computers in China at risk. At the same time the company increased its sale price of Windows 8 and China’s media claimed that Microsoft was abusing its monopoly position.
  • Currently there are three regulators in China, namely, the National Development and Reform Commission (NDRC), the State Administration for Industry and Commerce (SAIC) and the Chinese Ministry of Commerce. All regulators have the right to investigate monopoly behavior. The NDRC mainly deals with price controls, the Chinese Ministry of Commerce mainly deals with market concentration issues and the SAIC deals with issues such as abusing market power.
  • The article suggests that Microsoft may face a penalty of 1% to 10% of its annual income.

Referencing: [SGI] China’s Regulator Reportedly Investigates Microsoft (MSFT) About Monopoly