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Taiwan investigating Microsoft tactics

The Taiwanese government launches an investigation into allegations that the software giant misused its market dominance. The company denies the accusations.

The Taiwanese government has launched an investigation into allegations that Microsoft misused its market dominance by indiscriminately increasing prices.

A task force formed under Taiwan's Fair Trade Commission (FTC) will take at least six months to decide if action should be taken against Microsoft.

Established in 1992, Taiwan's FTC is charged with drafting fair trade policy, laws and regulations, and investigating and handling various acts impeding market competition such as monopolies, mergers and other restraints on competition or unfair competitive practices by businesses.

The FTC's action originated from complaints by existing Microsoft corporate users, who claimed Microsoft had forced them to start using an enterprise package by August, The China Post reported.

The customers told the regulatory body that Microsoft said it would cease all technical support if the August deadline was not met, the paper reported.

In the United States, nine states and the District of Columbia are pursuing stiffer antitrust sanctions against Microsoft, following a settlement deal made with the U.S. Justice Department and nine of 18 states.

Taiwan FTC officials were quoted as saying the investigation will seek to determine three issues:

• Whether Microsoft abused its market dominance and raised prices

• Whether forcing customers to use such enterprise software packages violates the country's fair trade laws

• Whether Microsoft retailers hiked prices during a recent crackdown on software piracy

During a press conference Tuesday, Microsoft Taiwan General Manager Eunice Chiou denied allegations that the company abused its monopoly status.

Under a trade ruling, a company head can be imprisoned for up to three years or face a maximum fine of NT$100 million ($3 million U.S.) if his or her company is found guilty of misusing its market leadership.

While Microsoft is being investigated under fair trade laws, Taiwan's National Teachers' Association has called on the software giant not to bill educational institutions, The Taipei Times reported.

"If Microsoft pressures schools to pay exorbitant fees on the premise of protecting intellectual property rights, the association will lobby international teachers' groups to boycott Microsoft products," said Chang Hui-shan, director at the National Teachers' Association.

Taiwan is racing against time to wipe out copyright piracy as it seeks to be expunged from Washington's "Special 301 Priority Watchlist" of intellectual property offenders. Countries named can face trade sanctions, but the United States hasn't taken any action against Taiwan, which has been on the list for the last four years.

CNETAsia's Joseph Chen contributed to this report. CNETAsia's Fran Foo reported from Singapore.