China regulator to investigate Microsoft

<p>Microsoft faces an investigation in China over “alleged monopoly actions”.</p>

Chinese authorities said today (July 29th) that Microsoft faces an investigation over its Windows operating system.

China's State Administration for Industry and Commerce said it was looking into "alleged monopoly actions" by the company. The announcement came after officials from the regulator visited some of Microsoft's local offices.

The company has not yet been accused of any specific wrongdoing and said it was working with officials. "We aim to build products that deliver the features, security and reliability customers expect," Microsoft said. "We will actively cooperate with the government department's investigation and answer related questions."

The visits to Microsoft offices come just days after the China's anti-trust regulator said that Qualcomm, one of the world's biggest mobile chipmakers, had used monopoly power in setting its licensing fees.

According to the BBC, this led some to allege that China is using anti-trust probes to protect domestic firms.

Challenges

"It has become increasingly clear that the Chinese government has seized on using the [anti-monopoly] law to promote Chinese producer welfare, and to advance industrial policies that nurture domestic enterprises," US Chamber of Commerce said earlier this year.

Microsoft also faces longtime challenges, including rampant piracy of its software in China, resulting in disappointing revenue.

The firm has announced it is to cut up to 18,000 jobs over the next year, marking the deepest cuts in the technology its history. In an open letter to staff, the firm said the bulk of the cuts (around 12,500) will be in its phone unit Nokia, which Microsoft bought in April 2014.

New chief executive officer Satya Nadella wants the firm to shift its focus away from software to online services, apps and devices. The cuts are aimed at helping Microsoft better compete with rivals including Google and Apple.

Microsoft Corp's shares were down 0.34 per cent to $43.82 (£25.87) today at 09:37 ET in New York. 

Find up to date information on the FTSE 100 and spread betting strategies at City Index.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.