China regulator probes Microsoft, Accenture offices
Ten hours ago
Chinese antitrust regulators are intensifying pressure on foreign technology and auto companies in separate moves that experts say show Beijing's desire to give Chinese companies greater heft in their dealings with foreign firms.
Chinese antitrust regulators from the State Administration for Industry and Commerce said they conducted surprise inspections on Wednesday of Microsoft Corp.'s China offices for suspected monopolistic practices. They said they were seeking executives who weren't in their offices when they raided its offices last week over suspected monopolistic activities.
"We're serious about complying with China's laws and committed to addressing SAIC's questions and concerns," Microsoft said Wednesday.
SAIC officials also said they are investigating Accenture's offices in the northeastern Chinese city of Dalian because the consulting firm was doing outsourced financial-services work for the U.S. software giant.
"We can confirm that, as required by Chinese laws, we are cooperating with investigators of the State Administration for Industry and Commerce and help provide them with certain information related to one of our clients. We have no other information for public disclosure," said a written response from the marketing department of Accenture Greater China.
Separately, a second Chinese antitrust agency on Wednesday said it would punish Audi AG and Fiat Chrysler Automobiles' Chrysler arm after an investigation found the two luxury-car makers had pursued monopolistic practices. Under China's antimonopoly law, the companies could face fines of up to 10% of their sales from the preceding year.
The companies have said they are cooperating, though they declined to release further details.
Experts say the rush of antitrust probes stems from increasing aggressiveness by regulators and a greater focus on the prices Chinese consumers and companies pay.
In particular, they are increasingly focused on Chinese companies' dealings with foreign partners. In many of the recent antitrust cases, the focus has been on foreign companies with dominant market positions and few or no alternative providers in China.
In the car industry, Chinese auto dealers say foreign brands push them to take more cars into inventory than they want or can afford and stipulate that dealers must buy auto parts from the car maker. Audi, an arm of Volkswagen AG, said pricing officials in China's Hubei province are investigating the German car maker's network of dealers there.
"Currently car makers spare no efforts to manage everything, even if it could be something as trivial as a showroom desk," Chinese auto dealer Lentuo International Inc. Chief Executive Jing Yang said in a recent interview.
Speaking in terms of broad industry practice, he added, "they will tell you where you should buy and how much you should pay. Dealers have no options at all."
Lentuo dealerships sell brands including Audi, Volkswagen, Mazda, and Toyota.
An official at the China Automobile Dealers Association, an industry group, said the NDRC's investigation was a "good start" but that the impact on dealers will be limited until regulations governing how to sell cars in China are changed.
China's intent with Microsoft is less clear because SAIC officials haven't disclosed the focus of the probe, beyond citing compatibility and bundling issues with its Office and Windows software. But it comes as the Chinese government has reacted with increasing concern to Microsoft's efforts to switch users to its new Windows 8 operating system. China banned procurement of Windows 8 for government offices earlier this year.
In China, Microsoft's venerable Windows XP has a nearly 55% market share, according to analytics firm StatCounter.
"There's been some anger among consumers and companies over Microsoft dropping support for Windows XP," said Duncan Clark, chairman of Beijing-based consultancy BDA China.
Microsoft has also struggled to get customers to pay for its software in China, where piracy is rampant. In 2011, then-Chief Executive Steve Ballmer told employees that Microsoft's revenue from China that year would be only 5% of U.S. revenue due to piracy.
Confusing matters, China has three regulatory agencies that oversee antitrust issues. The auto probes are being conducted by China's National Development and Reform Commission, which is China's top economic policy body and its top authority on pricing. The Microsoft probe is being conducted by the SAIC, which oversees nonpricing antitrust issues. A third, China's Ministry of Commerce, oversees mergers.
"The SAIC, NDRC and even the Ministry of Commerce are jockeying for position, trying to be seen to be tough on foreign companies," Mr. Clark said. "There is the attempt to gain the upper hand among these bodies."
The potential impact on the auto companies isn't yet clear. Macquarie Securities analyst Zhixuan Lin said in a research note that fines on auto makers may be "insignificant" because they have been "very cooperative" and have cut prices "proactively."
China regulator probes Microsoft, Accenture offices | Business Spectator
Inspur and Sugon can replace IBM and Oracle in the high-end server market.
Huawei can replace Cisco in the enterprise (high-end routers and switches, LAN/cloud equipment) market.
Loongsoon can replace Intel in the PC CPU market.
Rockchip and HiSilicon can replace Qualcomm in the mobile and tablet CPU market.
Baidu can replace Google in the web search and web browser market.
Lenovo can replace HP and Dell in the PC market.
Kingsoft can replace Microsoft in the Office Suite software market.
Qihoo 360 can replace Symantec in the anti-virus software market.
China Operating System can replace Google in the mobile operating system market.
NeoKylin can replace Microsoft in the PC operating system market.
YonYou and Kingdee can replace SAP and Oracle in the management software market.
Try harder kid, much much harder
China's Inspur vows to take over IBM’s local business
Summary: Inspur Group Ltd, a Chinese domestic server maker, says 80 ex-IBM employees have joined after it recently started a campaign to lure customers from Big Blue.
By Cyrus Lee June 2, 2014
Late last week the Chinese server business unveiled its “IBM to Inspur” initiative in Jinan, Shandong province, vowing to take over IBM’s server business in the country after reports indicated China's government has banned local banks from using IBM servers due to security concerns.
On Thursday, Inspur told Chinese media the company is ready to “comprehensively” take over IBM’s server business in China. Some 80 IBM former employees have already joined Inspur, according to the company.
Sina news
indicated that shares in Inspur hit highs in three consecutive days.
A document provided by Inspur showed the company started a nationwide roadshow on May 27 spruiking its data center products. These include high-end servers, generic servers, storage systems, cloud computing, big data, high-performance computing and mainframe security solutions, and applications.
Inspur said some Chinese financial institutions started replacing IBM servers and facilities at the end of last year. Some of these state-owned lenders, including China Construction Bank and Postal Savings Bank, have already selected Inspur servers for trials.
Inspur’s vice president Zuo Baichen said its server and minicomputer products now have the ability to fully usurp IBM's traditional position. The company has also strengthened after recruiting a large number of professionals from IBM and other foreign server vendors.
The Chinese government’s increasing awareness of information security has “outstripped” Inspur’s expectation, Zuo said, adding that the company wins government projects worth hundreds of millions of yuan every year.
A Bloomberg report on May 27 said the Chinese government is urging its domestic lenders to replace high-end IBM servers with locally-made products. No government agencies or Chinese banks commented on the report.
China's Inspur vows to take over IBM’s local business | ZDNet
This just goes to show how advance the U.S is. im sure these countries wont be using U.S tech companies software in their critical government systems if they had similar homegrown/local products with same quality/performance.
