Microsoft has been placed under investigation in China for possible breaches of anti-monopoly laws, according to various media reports.

China’s State Administration for Industry and Commerce (SAIC) posted a statement to its website on Tuesday (forgive the machine translation here) which said it had raided several Microsoft offices in the country as part of an ongoing investigation.

What isn’t clear is exactly what Microsoft is suspected of doing, but Xinhua suggests it’s suspected of not fully disclosing information of its Windows operating system and Microsoft Office application, causing incompatibility problems. According to Chinese law, incompatibility without advance warning to customers could be regarded anti-competitive.

SAIC officials apparently left with dozens of copies of documents, internal communications, emails, financial statements and other data following the raids on Microsoft offices in Beijing, Chengdu, Guangzhou and Shanghai. The Wall Street Journal adds that according to Chinese law, monopolistic behavior falls under criminal law, meaning that Microsoft faces potential fines of up to ten percent of its revenues.

Under Pressure?

Any sanction would be the latest in a long line of headaches for Microsoft in the Middle Kingdom. Despite the country’s massive size, Microsoft has struggled to generate revenue in China – so much so that ex-CEO Steve Ballmer was once quoted as saying the company makes more money in the Netherlands than it does in China. One of the main reasons for that is piracy. A recent study by industry pressure group the Business Software Alliance found that almost three quarters of software in China is of the copied kind.

Even so, Microsoft still enjoys a fairly dominant position over the software that is legal, and that’s something which makes life difficult for competitors.

Which is why China’s government has been making efforts to come up with more viable alternatives – like the Ubuntu-based Kylin and the imaginatively named China Operating System – although none of these have yet caught on.

More recently, China has come out and said it plans to spend millions to ensure that it’s government offices start using genuine, licensed software, which should there’ll be a lot less pirated copies of Windows running around. But at the same time, it’s also moved to ban Windows 8 from certain departments, claiming that it’s too expensive.

SAIC says that the investigation is ongoing, and is asking that Microsoft officials in the US also comply with its inquiries. Not surprisingly, Microsoft itself has declined to comment on the matter.

photo credit: Jonathan Kos-Read via photopin cc