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China Launches Anti-Monopoly Investigation of Microsoft

China is focusing on operating systems and other software that costs more domestically than in the U.S.

China has begun an anti-monopoly investigation into Microsoft and several other global software firms, the country's intellectual property watchdog said June 18. The development comes with Microsoft already embroiled in a standoff with the top antitrust watchdog in Europe, where officials have long accused the software titan of abusing its dominant market power.

"Our departments are carrying out the investigation," a spokeswoman with China's State Intellectual Property Office said. China's debut anti-monopoly law comes into effect on August 1.

The probe by Chinese regulators focuses on operating systems and other software developed by international companies that cost much more in China than in the U.S., one source was quoted by the Shanghai Securities News as saying. "One one hand, global software firms, taking advantage of their monopoly position, set unreasonably high prices for genuine software while on the other hand, they criticize Chinese for poor copyright awareness. This is abnormal."

One set of the Windows operating system plus Microsoft Office software can cost up to 7,000 yuan (US$1,015) in China, making it more expensive than a personal computer, the source said.

Beijing-based Microsoft China said it was not aware of an anti-monopoly investigation, but added it "fully supports China's efforts to establish an environment conducive to promoting fair competition. We believe efforts such as the AML (anti-monopoly law) will better safeguard interests and benefits of consumers, encourage innovation and enhance economic development," it said .

China's parliament passed the anti-monopoly law last year, sparking concern among U.S. and European business groups. The law requires that proposed mergers or takeovers of Chinese firms by foreign companies must be checked to ensure that they do not endanger national security or lead to monopolies.

Copyright Agence France-Presse, 2008

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