By Colum Murphy and Eva Dou
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."
Rose Yu in Shanghai and Yang Jie in Beijing contributed to this
article.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires