China to investigate Microsoft for monopoly power

China is investigating Microsoft’s market position in the country to make sure it is not abusing its position..

China's State Intellectual Property Office has announced the investigation into pricing after concerns that legitimate copies of Windows and Office are being priced up to maximize profits and the country moves towards more use of legitimate software.

"Microsoft Windows retails at 1,000-2,000 yuan ($145-$290) and its Office software suite at 4,000-5,000 yuan, which together is more than the cost of a computer," an official told Reuters.

"It is not right for an international company to use its monopoly position to sell software at outrageous prices while criticising the Chinese people's awareness of copyright law."

China has come in for repeated criticism over piracy rates in the country from the Business Software Alliance, a pressure group founded by the major software companies like Microsoft to push for increased action to defend legitimate software. It estimates up to 80 per cent of software in use in the country is pirated.

However, this activity could have provoked the current investigation by the State Administration of Industry and Commerce (SAIC).

"Microsoft's case has been such a saga in the European Union, and I think if SAIC are willing to investigate at all, they will have to spend a lot of resources and time on it,” said a Chinese intellectual property lawyer.

"It would be a political decision. At a certain time, they may want to pick one company and make an investigation. It always looks good on the front pages."