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Microsoft Spotlights Rise Of JD, Anti-Trust Probes

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Bamboo Works
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US software giant Microsoft (NASDAQ:MSFT) is the subject of 2 major news stories today, casting a spotlight on a pair of very different trends involving e-commerce and foreign companies in China. The first news bit has the world's largest software company formally launching sales of its Xbox gaming console in China through a tie-up with JD.com (JD), spotlighting the rapid rise of China's second largest e-commerce company following its own tie-up with Internet giant Tencent [(HKEx: 700), (OTCPK:TCEHY)] earlier this year. The second news bit looks more ominous, with word that Microsoft is being probed by one of China's anti-trust regulators.

Let's start with the anti-trust news, as that's perhaps the most worrisome because it reflects an increasingly hostile atmosphere in Beijing towards foreign firms in China. A number of factors are probably behind this recent wave of actions against foreign firms, including growing trade tensions between China and the west and also a recent anti-graft campaign that has ensnared both Chinese and western companies. But the bottom line is that foreign firms are suddenly becoming increasingly vulnerable to both criminal and anti-trust actions in China, often causing severe business disruptions.

According to the latest reports, Microsoft offices in Beijing, Shanghai, Guangzhou and Chengdu have recently been visited by Ministry of Commerce officials conducting an unspecified investigation. (Chinese article) Microsoft confirmed the visits and said it is cooperating, though it's unclear what exactly the Commerce Ministry officials were investigating.

Speculation is rife that the US software giant is being probed for monopolistic behavior, since the Commerce Ministry is one of China's handful of regulators that conducts such probes. Other major foreign firms that have come under recent anti-trust investigations include US smartphone chip giant Qualcomm (QCOM) (Chinese article) and several Germany luxury car makers. (Chinese article)

We'll have to wait

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