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China Launches Antitrust Probe Vs. Microsoft

Posted by CmdrTaco on Wed Jun 18, 2008 10:21 AM
from the get-on-the-bus dept.
snydeq writes "China has launched an investigation into whether Microsoft unfairly dominates its software market, according to a state media report. A working committee of China's State Intellectual Property Office is investigating whether Microsoft engaged in discriminatory pricing and will also look at Microsoft's practice of bundling other software programs within its Windows operating system, according to the report. The probe is part of a greater sweep of operating systems and other software developed by multinational companies that cost much more in China than in the U.S. 'On the one hand, global software firms, taking advantage of their monopoly position, set unreasonably high prices for genuine software while on the other hand, they criticise Chinese for poor copyright awareness. This is abnormal,' a source said."
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[+] Your Rights Online: China Says There's No Antitrust Probe On Microsoft 87 comments
natenovs writes "China's intellectual-property rights enforcer said the government isn't probing Microsoft Corp. for breaching antitrust laws, denying yesterday's report by a state-owned newspaper. 'We are not conducting an anti-monopoly investigation against Microsoft and have no plans to do so,' Yin Xintian, a spokesman and legal director at the State Intellectual Property Office, said by telephone today in Beijing. The newspaper's report is 'completely untrue,' the agency said on its Web site."
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  • Wha? (Score:5, Insightful)

    by wamerocity (1106155) on Wednesday June 18 2008, @10:23AM (#23839707) Journal
    I don't think you can call it a monopoly if all the companies software in your country is pirated.
    • Re:Wha? (Score:5, Insightful)

      by hey! (33014) on Wednesday June 18 2008, @10:40AM (#23840017) Homepage Journal
      Well, given that said company wants the country to do something about it, then whether the way they set and enforce prices is legal in that country is certainly a relevant question. If Microsoft is calling upon China to enforce its intellectual property laws, it can hardly complain if China agrees, but also insists on enforcing its anti-trust laws.
    • by Ukab the Great (87152) on Wednesday June 18 2008, @10:41AM (#23840031)
      China To Microsoft: "You're trying to have a monopoly on what we've rightfully stolen"
      • Re: (Score:3, Insightful)

        That's funny. Isn't that why people pirate music? People here usually think that is a valid excuse / reason. Attn: DOJ, time to sue the RIAA!
      • Your (Microsoft) software is so good and so expensive
        I know. The timing of this investigation shows the Chinese are reeling from how good Microsoft's software is, now that Vista's out.
        • Re:Wha? (Score:4, Insightful)

          by megaditto (982598) on Wednesday June 18 2008, @11:55AM (#23841267)

          The Chinese plan is different from the US plans, how, exactly?
          American plan: America should be on top.
          Chinese plan: America should not be on top.

          I think most Americans can see the difference.
        • Re:Wha? (Score:5, Informative)

          by megaditto (982598) on Wednesday June 18 2008, @12:16PM (#23841623)
          No, you are wrong. I wish people would stop calling China "communist," since it is not. Their economic system is a free-market capitalism, with elements of fascism (the original definition - "authoritarian union between the government and big businesses" - not the Gowin/deathcamp definition).

          Their political system is dictatorship, since they are governed by unelected representatives. Hence, the correct description for China would be capitalist dictatorship.

          The reason they don't like Microsoft (or Google) is because the profits go to USA instead of to their government-endorsed corporations like China Telecom, Nuesoft, Baidu, Kingsoft, etc. And we are not talking peanuts here either: last year Microsoft alone paid about US$ 7,000,000,000 in taxes, 70+% of which came from foreign sales.
          • Re:Wha? (Score:5, Informative)

            by magarity (164372) on Wednesday June 18 2008, @01:24PM (#23842709)
            you are wrong. I wish people would stop calling China "communist"
             
            Actually, the gp said China was run by the communist party, which is 100% correct. His error is in thinking that any given communist party has the opposite agenda as a monopoly. On the contrary, communist parties are notorious for ruling as monopolies. Meanwhile, you are correct about the self-designated "communists" but that's another matter.
          • Re:Wha? (Score:5, Insightful)

            by jc42 (318812) on Wednesday June 18 2008, @04:50PM (#23846033) Homepage Journal
            I wish people would stop calling China "communist," since it is not.

            Look at it this way: China is Communist in the same sense that America is Christian.

            The leaders of both nations use the name, but they pretty much violate all the principles behind the name.

            Of course, they're not the only country for which this is true.
  • Abnormal? (Score:3, Funny)

    by Xelios (822510) on Wednesday June 18 2008, @10:24AM (#23839727)
    "set unreasonably high prices for genuine software while on the other hand, they criticise Chinese for poor copyright awareness. This is abnormal"

    Actually, that sounds pretty normal to me.
  • Par for the course (Score:5, Insightful)

    by 140Mandak262Jamuna (970587) on Wednesday June 18 2008, @10:25AM (#23839733) Journal
    Don't read too much into the story. All it means is one more high party official is looking to get his share of payments to the top officials in China. Once a few million $ are safely handed over, the probe will be frozen, to be thawed only during the negotiations of the next payment.
    • Re: (Score:3, Insightful)

      My distinct impression was that most of the corruption in the Chinese government was closer to the local level. Do you have any solid information to the contrary?
      • Most != ALL

        Local corruption is blatant but you negotiate with the corrupt party directly openly discussing the quids for the pro quos. Higher you go, complex it gets. Often you deal with intermediaries, and you are not sure if they really represent the official they claim to represent, what is given and what is expected gets lost in translation.

        And of course, I don't have any evidence. That is par for the course in slashdot. Announcements like this is a typical way to authenticate the official bribe t

  • by suck_burners_rice (1258684) on Wednesday June 18 2008, @10:25AM (#23839735)
    In other words, China is jumping on the bandwagon of countries that is playing the "Sue Microsoft Lottery" to get some extra cash. I mean, I don't like Microsoft's products, particularly their operating systems, because I think they've completely lost touch with what a computer is supposed to do, but when it comes down to it, it's our fault, not Microsoft's, that their junk software is so ingrained in the entire computing industry. We are the ones who vote with our dollars, and so, if you don't like Microsoft, or their software doesn't get the job done for you, then don't pay them your money. But don't wine and complain about them either. And certainly don't play the Microsoft lottery. That's ridiculous.
    • by BlueParrot (965239) on Wednesday June 18 2008, @10:29AM (#23839827)
      I have an alternative interpretation.

      If you don't like the rules in the country you try to do business in, then don't do business there, and don't whine when their courts fine you for breaking them. Or perhaps this issue is a little bit more complex than a one sentence argument?
      • Re: (Score:3, Insightful)

        But when the country is China? Come on. China! Like ANYONE or ANY company could get a fair trial there. There are no human rights, what makes you think that large non-govt. corporations will have any?
        • Re: (Score:3, Interesting)

          I think you have understood my point perfectly, thou you didn't attribute it to me. Claiming "the solution" is as simple as the parent of my post did is naive at best. It doesn't matter if you are arguing in favor of anti trust laws or against them, pretending that the issue is merely a matter of "if you don't like it, don't take part in it" is naive at best. This applies just as well to customers at the mercy of a supplier as it applies to companies that are at the mercy of the local laws. My point was sim
    • by RiotingPacifist (1228016) on Wednesday June 18 2008, @10:33AM (#23839913)
      You clearly dont have a clue about anti-competitive practices of Microsoft and how monopolies & cartels stop market forces working, meaning that "We are the ones who vote with our dollars, and so, if you don't like Microsoft, or their software doesn't get the job done for you, then don't pay them your money." doesn't really apply when there is no other option.
        • Re: (Score:3, Interesting)

          This is lost.

          If they show that they can sell Windows for a profit at $20 a copy in China, it's the beginning of the end for charging $300 a copy elsewhere. The fact is that an extra copy at $1 is profitable for them.

          So they want to sell all the $300 copies, then all the $200 copies, then all the ... $20 copies. To maximize their profits. So they have to manage perceptions. Folks are already balking at their quality/prices.
    • In other words, China is jumping on the bandwagon of countries that is playing the "Sue Microsoft Lottery" to get some extra cash.

      And I say, good for them. Microsoft has a decades-long history of lying, cheating, stealing, and generally screwing over the rest of the world in order to rake megabucks into their war chest. Therefore I have absolutely no sympathy when someone else screws them. If they want to play dirty then let the rest of the world play dirty against them. I hope the whole world has their

  • by fprintf (82740) on Wednesday June 18 2008, @10:25AM (#23839745) Journal
    So there is an anti-trust investigation over the one legitimate copy of Windows in China?
  • by Anonymous Coward on Wednesday June 18 2008, @10:35AM (#23839929)
    Just another step in China's eventual bludgeoning of the American economy. First you openned the door to trade with them. Now they outproduce you, and now they seek to sue your comapnies for wrong dealings while undercutting your prices and pirating the hell out of your goods. A lot of good people saw this coming, and now we just sit back and watch the sad dance play out to its bitter end.
    US trades with China.
    China outproduces USA on material items.
    USA moves to Intellectual Property.
    China ignores IP laws except where it suits them to make money.
    US economy collapses
    China is new global superpower.
    • Re: (Score:3, Insightful)

      True that. We survived WWII and came out on top because of our ridiculous manufacturing power and natural resources. For years we were helping the world rebuild. Then we decided we were too good for that crap and started outsourcing... Well - what'd we expect? China beat us at our own game. There are 4 times as many Chinese people, the government controls *everything*, and they don't give a crap about trashing the environment in the process of becoming a superpower. How do you compete with that? Oh, I know!
    • by DNS-and-BIND (461968) on Wednesday June 18 2008, @11:25AM (#23840773) Homepage
      My, the ignorance is breathtaking. Wishful thinking, at best.

      China is *hugely* inefficient, which is mostly masked by their huge growth. One thing that you have to remember is that the Chinese economy has *never* gone down in living memory. It's all up, up, up since Mao died and the national nightmare ended. This results in things like people opening businesses with no idea what they're doing, and the business succeeds anyway due to runaway demand. I see small shops open and close all the time, and it's the same story - no plan, no strategy, no marketing. It's just 'I'll open the doors and people will flood in.' The Chinese are geniunely shocked when they don't, and can't figure out what they did wrong. Really. Massive inefficiency is a hallmark of a prolonged boom (more annoying facts again - don't worry, I won't include any math) and China has been a boom (14%+ growth) for 30 years.

      The Chinese don't invent new things, which is going to really start hurting in a few years when all their low-cost manufacturing isn't low-cost any more. I see it every day, a lot of people really don't know how to solve problems except for copying someone else, even to the point of investing huge efforts into it. Just think of how much better off China would be if they had developed their own indigenous computer systems instead of just pirating Windows. And no, I have yet to see a single installation of this "Red Flag" linux that someone always spouts off about. China does in fact have IPR laws, and they do work, but you have to actually follow them. Speaking of laws, there is a new anti-monopoly law in effect this year, and it's going to be used by the government as a club to bash foreign enterprises. Of course, Chinese monopolies are safe. Remember, cheating foreigners is patriotic.

      Anyway, that's just my personal experience. Feel free to keep wishing hard for America to fall and China to rise. For further reading, for those of you who made it this far, check here (true today as when it was written) [tsquare.tv] and Danwei [danwei.org] and China Law Blog [chinalawblog.com]. Sorry to inject facts into the fantasy exercise - I realize it's a downer.

        • by DNS-and-BIND (461968) on Wednesday June 18 2008, @01:15PM (#23842547) Homepage
          See? Copying. No innovation, no new ideas, no paradigm-shattering venture. Just a clone of XP, just as accurate as they can get it. And that you called it "my country's linux" is very very revealing. Do Americans call Redhat "their country's linux"? Germans call SuSE theirs? (Novell whatever) Rabid nationalism is going to play a huge part in the future, too. Foreigners are to blame for all of China's problems.

          QQ sucks raging donkey balls. I'm not surprised they constantly monkey with the protocol. When all you do is rip off others, you get really good at it, and you know how to avoid getting ripped off yourself. I would call this blatant hypocrisy, but then hypocrisy is a Western concept that has no equivalent in China. It's always been "the leader commands this" and instead of wanting to make everyone equal, Chinese just want to become the leader so that they can be hypocrites, too. Fundamental cultural difference.

  • by damburger (981828) on Wednesday June 18 2008, @10:39AM (#23839997)
    That just gave me the best chuckle I've had all day
  • Perhaps this is a prelude to the Chinese government looking to do something better with American dollars than have them sitting in US government debt. If the Party were looking to buy out Microsoft, they could really have the rest of the world bent over a barrel, enjoying a tremendous amount of control over anyone that uses MS software.

    Not only that, it finally gives the BSA the power it's looking for - let's hear it for the Chinese military fighting the BSA's battles to defend Microsoft's owners and their IP...
  • oxymoron (Score:4, Insightful)

    by pak9rabid (1011935) on Wednesday June 18 2008, @10:47AM (#23840145)

    China's State Intellectual Property Office
    Now there's an oxymoron if I've seen one
  • by DigitalCrackPipe (626884) on Wednesday June 18 2008, @11:12AM (#23840531)

    cost much more in China than in the U.S.
    What? Prices are much lower in China, since few there can afford the prices charged in the US (consider the cheap version of XP designed for poorer markets). What they mean is that the prices are higher relative to the mean income, which is a completely different statement.
  • ...if this isn't the hammer calling the sickle black.
    • Re:What? (Score:4, Informative)

      by flyingfsck (986395) on Wednesday June 18 2008, @10:25AM (#23839739)
      China isn't any more communist than for example the UK, Canada or Australia.
      • Re:What? (Score:5, Insightful)

        by wattrlz (1162603) on Wednesday June 18 2008, @10:27AM (#23839789)

        Except for the part where they proclaim to be.

      • Re:What? (Score:4, Insightful)

        by Robert1 (513674) on Wednesday June 18 2008, @10:33AM (#23839909) Homepage
        You're totally right. They aren't communist. What they are is fascist.

        "Anti-individualistic, the fascist conception of life stresses the importance of the State and accepts the individual only insofar as his interests coincide with those of the State, which stands for the conscience and the universal will of man as a historic entity.... The fascist conception of the State is all-embracing; outside of it no human or spiritual values can exist, much less have value.... Fascism is therefore opposed to that form of democracy which equates a nation to the majority, lowering it to the level of the largest number...."

        Best description of China I ever read. That's straight from Mussolini's "The Doctrine of Fascism."

        On a related note anyone read the article on how Chinese police jailed parents who tried to go back to the faulty death-traps - I mean schools - their government had built. The police were also instructed to keep foreign press away from the schools and to not let anyone take photos. A pretty good example of how the most important thing is the state above all - including it seems the needless deaths of children.
        • Re: (Score:3, Interesting)

          Agreed 100%, and it is an absolute farce that they were awarded the Summer Olympic Games. Tens of thousands of people were displaced in order to build facilities and erase "unsightly" slums.

          I'm interested in seeing what the Tibetans get up to during the Games though - my guess is shenanigans will ensue, with the predictably heavy-handed military response. These Games could (hopefully will) end up being the biggest clusterfuck in the history of the Olympics.

          • Re: (Score:3, Insightful)

            Agreed 100%, and it is an absolute farce that they were awarded the Summer Olympic Games.

            I can't believe the IOC even considered China. It's like hosting the games in Nazi Germany and having Hitler preside over the event.

            Oh wait...
            • Re:What? (Score:5, Interesting)

              by thewils (463314) on Wednesday June 18 2008, @12:23PM (#23841725) Journal
              It's because the the IOC like the secrecy of the Chinese Government better than any democracy. The worst games for the IOC were Lillehammer where everything was in the open - including the bribes paid to IOC officials to host the games.
        • Re:What? (Score:4, Informative)

          by Quattro Vezina (714892) on Wednesday June 18 2008, @12:43PM (#23842033) Journal
          There is very little difference between fascism and communism.

          Both ideologies claim that society is greater than the individual. Both ideologies condemn all actions that don't benefit society as a whole. Both ideologies support environmentalism.

          The difference? Communism sees society as encompassing all humanity, while fascism sees each state as its own society. Fascism is prone to nationalist posturing, while communism isn't.

          Both fascism and communism oppose free-market capitalism. Fascism refers to an ideology called "corporatism", but that has nothing to do with corporations in the modern sense; the "corporations" in corporatism are basically trade guilds. Corporatism is about both putting society under the control of a collective, and tying such collectives into the state. It fits in with the whole "society as a whole" model, with each function of society overseen by its own collective, and all the collectives are part of a larger collective (i.e. the state).

          China isn't really fascist; they allow multinational corporations to do business there, which real fascists would condemn. If China was fascist, they wouldn't let even local companies practice unfettered capitalism the way they do. A fascist state wouldn't let Chinese companies pollute as much as they do, nor would they let the companies do things like put lead paint into toys.

          Now, I'm not defending fascism in any way. I'm a staunch individualist, and I despise both fascism and communism. My point is that China isn't really any more fascist than they are communist. Well, they do more than their share of hyper-nationalist posturing, but that's about it. China is simply a totalitarian state that tolerates capitalism. The free market is the one exception to China's totalitarian control over their people.
      • Re:What? (Score:5, Insightful)

        by Hal_Porter (817932) on Wednesday June 18 2008, @10:41AM (#23840035)

        China isn't any more communist than for example the UK, Canada or Australia.
        There's a school of thought that says that German Nazism in WWII and Russian Communism were essentially two identical versions of the same system which just claimed to be different. Of course Hitler and Stalin had different hate groups, but the actual systems they built were in practice very similar.

        So it's quite possible for a Communist country like China to change their official ideology to Han Chinese nationalism and corporate state/slave labour capitalism and still be just as far from the UK, Canada or Australia.

        So don't be fooled that they given up on 'Communism'. The PRC was never very socialist anyway, most European democracies went much farther down that path.
        • Re: (Score:3, Insightful)

          Very true. The far crazy right isn't that different from the far crazy left when you truly look at it.

          This no value added comment brought to you by one bored guy.
        • Re:What? (Score:5, Interesting)

          by TheNarrator (200498) on Wednesday June 18 2008, @12:23PM (#23841723)
          China's economic ideology is different from the west. Let me explain how:

          U.S
          * Banker makes loan to whoever they damn well please.
          * Loan doesn't get re-paid
          * Other bank takes over banks assets and screws depositors over 100k.
          China:
          * Banker makes loan to favored state owned company or other entity.
          * Loan doesn't get re-paid.
          * Government recapitalizes bank.

          U.S
          * Banker makes a bunch of questionable bad loans
          * Retires with golden parachute package
          China
          * Banker makes a bunch of questionable bad loans
          * Banker is executed by government

          U.S
          * Bankers en masse make loans to fund housing/stock bubble
          * Government runs to see how they can loosen regulations to help the banks make exponentially more money and profit
          * Bubble bursts, banks are bailed out by government discount window loans, TAF, TSLF,etc

          China
          * Bankers en masse make loans to fund housing/stock bubble
          * About 1 year after it gets going government raises real estate transfer tax or stock trading taxes and bank reserve requirements to purpousefully punish the speculators.
          * Bankers who make ridiculous corrupt loans are executed. Some banks who didn't get swept up in the bubble keep operating as usual

          Long story short. In China, unlike in America, the politicians actually have far more control of the economic activity in their country than the bankers do.

    • Re:What? (Score:5, Insightful)

      by meringuoid (568297) on Wednesday June 18 2008, @10:29AM (#23839829)
      What use would Communist China have for anti-Trust laws

      China is being heavily leant upon by the US and its stooges to do something about their prevailing culture of piracy - you know, the great DVD markets of Hong Kong and Shanghai where every film is available a month before it reaches the cinema, all that stuff. It's all to do with international trade agreements; China gets to make more money selling abroad if they stop ripping off Hollywood and Silicon Valley.

      Hitherto China has been happily ignoring Microsoft's monopoly by simply pirating everything. If they're going to go legit then they're going to make damn sure they don't end up paying through the nose for it, so they're raising the same monopoly issue that the US and the EU have done. After all, if China is going to play fair, then so must Microsoft.

        • Re: (Score:3, Interesting)

          You see, that's where I get really foggy on this whole MS anti-trust issue. I'm pretty sure it's considered "unfair practice" to sell your product to one area (State?) for less or more than another at base cost. (making one market pay more to cover the cost of underselling your product in another market ... ahem $3 per license Windows in Africa(?)) Shipping and taxes would influence the end price. This is what confuses me about how Microsoft does business and how it's still considered legal. The cost o
          • Re:What? (Score:4, Insightful)

            by meringuoid (568297) on Wednesday June 18 2008, @11:59AM (#23841361)
            Isn't it global anti-trust to sell a product for less in one country than you do another?

            Ordinarily, no, I don't think so. There's a natural limiting factor to this kind of thing, because if you sell your product much more cheaply in a poor market than in a rich one, then people will make good money buying up stock in the poor countries, shipping it to the rich countries, and selling it on at a profit while still undercutting your official price there.

            The problem comes when the product has a near-zero marginal cost to produce, and near-zero weight. It costs Microsoft almost nothing to stamp out ten thousand Windows disks and sell them in east Asia for a dollar each; if that's what it takes to compete in that market, a dollar per copy is better than nothing. But similarly, it costs me almost nothing to buy up ten thousand Windows disks and ship them to England, there to be sold in a street market; I can undercut their official price by a huge margin, and still turn a healthy profit.

            Thus Microsoft play silly buggers with the EULA, claiming that their product is licensed not sold, and that it's illegal to use in England the copy they sold in China. And Hollywood play silly buggers with region coding as well, to make sure Europeans don't buy DVDs from America of films that aren't yet in our cinemas, and to make sure neither of us buys DVDs from China priced super-cheap to compete with the pirate market. Is that legal? Don't know, but it's sure as hell not right. If globalisation and free trade benefit the corporations, who'll outsource your job at the drop of a hat, it should work for us too: I want to outsource my DVD buying, thank you very much.

            One thing I'm pretty sure of is that this is not legal within the EU. You can't sell a product cheaply in Slovenia and dearly in Germany, and then complain when the Germans buy in Slovenia. Apple ran afoul of that a little while ago with their iTunes pricing structure, though I'm not sure how that turned out.

            • Re: (Score:3, Insightful)

              No, you pay more because you don't have large institutions negotiating the price on drugs on larga scale (such as countries with nationalized health care), and because your insurance companies rape you for them, as their interests are aligned with those of the insurers. That, and the fact that the FDA functions in a completely innefficient manner.

              Do remember that a lot of big pharma is based on Europe. Take Novartis for example.

    • Re: (Score:3, Informative)

      In other news Microsoft is seeking an injunction against the FOSS community for unfair competition practices.

      This is an old sentiment. From the Halloween Document [catb.org] of the eponymous date in 1998:

      Linux distributors, such as RedHat, Caldera, and others, are expressly willing to fund full time developers who release all their work to the OSS community. By simultaneously funding these efforts, Red Hat and Caldera are implicitly colluding and believe they'll make more short term revenue by growing the Linux market rather than directly competing with each other.

    • by hany (3601) on Wednesday June 18 2008, @12:04PM (#23841449) Homepage

      Microsoft products don't force you to use more Microsoft products, it's just generally more efficient if you do.

      Well, I tend to disagree.

      Imagine you are responsible for the whole IT infrastructure of some company. The size of the company does not matter. Imagine you choose to deploy say Microsoft Office 2003 or (if you are more oriented or pushed towards smaller costs and/or increased "freedom") even OpenOffice.org .

      Now try to imagine a reaction of a CEO of given company after:

      1. some potential client of the company sends you a document created in Microsoft Office 2007
      2. your coworkers (sales, engineering, ...) failed to open the document or failed to open it properly thus creating some problem
      3. thanks to that problem client takes the business elsewhere and your company looses revenue
      4. you tell to CEO: "we did not lost income, we are just slighly less efficient"

      To add more spice, imagine that client was a big one and potential income (and thus real loses) are quite big.

      :)

      All that thanks to inability or whatever of Microsoft to use and follow open standards or at least some decent backward compatibility and our quite small ability to push them toward that (thanks in quite big proportion to what some people call "dominant position in the OS market for PC" or, more importantly "dominant position in the office document format market for document exchange" which stems from the firts one), which would ussualy make the above example non issue.