Microsoft and China continue duel over Windows 8

microsoftThe fight over Windows 8 between the Chinese government and Microsoft has heated up this week.

A news show on Chinese state-run television ran a segment earlier this week claiming that Microsoft is able to collect sensitive data about Windows 8 users, and then can share that information with the NSA or another U.S. government agency. Ni Guangnan, a professor at the Chinese Academy of Engineering, made a number of claims about what Microsoft could do with its OS, according to a transcript of the segment posted by the Wall Street Journal.

“It’s very easy for providers of operating systems to obtain various types of sensitive user information,” he said. “They can find out your identity, your account information, your contact list, your mobile phone number. With all that data together, using big data analysis, a party can understand the conditions and activities of our national economy and society.”

To combat the claims, Microsoft took to its account on Weibo, the popular Twitter-like Chinese social network, and denied the allegations with five counterclaims, reproduced below. (Translation via Neowin)

  1. Microsoft has never assisted any government in an attack of another government or clients.
  2. Microsoft has never provided any government the authority to directly visit our products or services.
  3. Microsoft has never provided any so-called “Backdoor” into its products or services.
  4. Microsoft has never provided the data or info of our clients to the U.S. Govt. or National Security Agency.
  5. Microsoft has never concealed any requests from any government for information about its clients.

Microsoft has joined a long list of other tech companies that have fallen under Chinese scrutiny in recent weeks. State-run media alleged this week that a number of U.S.-based tech companies, including Google, Apple, Microsoft and Yahoo, could become “cybersecurity threats.” The government is also reportedly asking banks to replace their IBM machines with Chinese-made counterparts as a part of a test program, according to a report by Bloomberg.

China’s media campaign comes after the U.S. Justice Department indicted 4 members of the People’s Liberation Army who are allegedly responsible for hacking into computer systems at a number of U.S. companies and stealing corporate secrets. Following those indictments, the Chinese government threatened retaliation against the U.S.

While this fracas is taking place, the Chinese government is creating a Linux-based OS that’s designed to serve consumers in the Middle Kingdome, though the product isn’t available yet. Of course, any operating system would also have to replace certain key Microsoft products, like its Office productivity suite, which are widely used in China.

The ongoing fight could be a setback for Microsoft’s hopes of increasing revenues from the Middle Kingdom. The Redmond-based company has faced serious problems with Chinese software piracy in the past. Steve Ballmer said in 2011 that revenue from China was roughly 5 percent what the company made in the U.S., despite China’s larger population. Microsoft has been pushing for more Chinese consumers to start using licensed versions of its software, and it’s not clear how this particular media campaign will affect those efforts.

We’ve reached out to Microsoft for a comment on this piece, and will update it when we hear back.

  • Karl J. Weaver

    Such foolishness, China has always been this protectionism, and what I call Techno-Nationalist, Microsoft has never made money in China, yet for 20 years outsources technology to R&D centers in Beijing with the quid pro quo that China will open it’s markets to them to sell their OS, Most USA Tech firms practiced Globalization 101 with an immature mindset about how things really work in the Chinese World. In the tech sector where China is the Worlds’ factory floor, certain subtle market leverages are used against all foreign companies to keep them blocked from sustained growth long-term in China as Chinese firms go abroad to grow. Microsoft and all foreign company’s perhaps should invest in developing strong sales forces from HQ to focus on solving market access protectionism. More hardware vendors should consider moving production to Mexico where there is currently no threat of reprisal because of political activities by their governments, which in turn directly affect their market access. China will eventually open the market back up to Microsoft but in the meantime, China is digging their own graves because even if the American Chamber of Commerce in China doesn’t have the political courage to protest, you can already see American companies looking for an exit strategy against continuous IP thief and leakage in China. Americans have ignorantly gone into China since the 1980′s thinking all they need to do is hire locals nationals to interface with the Government, but Nationalism is thicker than bribery.

  • balls187

    “Microsoft took to its account on Weibo, the popular Twitter ripoff, Chinese social network”

    There fixed it for you.

  • mildmanneredjanitor

    Makes me think the Chinese are putting back door spying on all that hardware they manufacture. Time to switch to Mexico.