China launches raids against Microsoft Corporation, orders probe

Written by Agencies | Beijing | Updated: Jul 29 2014, 13:50pm hrs
MicrosoftThe world's largest software company has had a rocky time in China, including a call by state media for "severe punishment".(Thinkstock)
China has placed US Satya Nadella-led technology giant Microsoft Corporation under investigation while officials today conducted raids on its offices in four cities.

The State Administration for Industry and Commerce sent its investigators to the company's offices in Beijing, Shanghai, Guangzhou and Chengdu for an official investigation, Hong Kong-based South China Morning Post reported.

It is unclear why the company is being looked into, it said.

Microsoft China spokeswoman Joan Li confirmed that the company was being investigated and said it would "actively cooperate" with the government.

She did not specify what the investigation was about, the Post report said.

In late May, China announced it would ban government use of Windows 8, Microsoft's latest operating system mostly due to suspicions about cloud technology which stores key information elsewhere.

The ban was sought to ensure computer security after Microsoft ended support for its Windows XP operating system, which was widely used on the mainland.

The state-run broadcaster CCTV also aired a strongly critical programme in which experts suggested Windows 8 was being used to grab information on Chinese citizens.

Experts said the operating system posed a "big challenge" to China's cybersecurity efforts.

They also suggested that Windows 8 was one of the methods that the United States' National Security Agency was using to spirit data out of China, the report said.

Chinese officials have previously stressed that Microsoft should lower the price of Windows.

They have also told local news media that the nation should develop its own operating system to reduce its reliance on foreign companies.

But the Chinese government continued to be a major Microsoft customer.

Microsoft says government officials make sudden visits to China offices

(Reuters) Chinese government officials have made sudden visits to Microsoft Corp offices in China, a spokeswoman for the company said on Monday, but declined to give any reason for the inspections.

China's State Administration for Industry & Commerce, which Chinese media reported had made the visits to Microsoft offices in Beijing, Shanghai, Guangzhou and Chengdu, declined to give comment outside of working hours.

Microsoft has been a focus of anti-U.S. technology sentiment in China since U.S. National Security Agency (NSA) contractor Edward Snowden revealed widespread spying programmes, including PRISM, which used U.S. company's technology for cyber espionage.

In an e-mailed statement, the Microsoft spokeswoman said: "We aim to build products that deliver the features, security and reliability customers expect and we're happy to answer the government's questions," but declined to give any further information.

The world's largest software company has had a rocky time in China, including a call by state media for "severe punishment" against American tech firms for helping the U.S government to steal secrets and monitor China.

Earlier this month, activists said Microsoft's OneDrive cloud storage service was being disrupted in China.

In May, central government offices were banned from installing Windows 8, Microsoft's latest operating system, on new computers. This ban appears to not have been lifted, as multiple procurement notices since then have not allowed Windows 8.

Nevertheless, the company has pushed forward with plans to release its Xbox One gaming console in China in September, forming distribution ties with wireless carrier China Telecom Corp and e-commerce company JD.com Inc.