Microsoft – We Don’t Have a Monopoly in China Because of Piracy

Here’s a relatively unique way to blame piracy – say that it’s the reason you don’t have a monopoly to avoid anti-trust fines.

Note: This is an article I wrote that was published elsewhere first. It has been republished here for archival purposes

There are those that hear the same old tired scapegoat. Profits down? Blame piracy. Sales down? Blame piracy. Sales up? It’s in spite of piracy and there could be more sales. Profits up? It’s in spite of piracy and they could be higher. Who knew that a major software giant would use piracy to their legal advantage?

It’s an interesting development. According to ALB Legal News located in Australia, “Microsoft may have a viable legal defence against its first ever anti-monopoly claim in China, given the prevalence of pirated Microsoft products in the country and how “market share” is defined by the Chinese authorities.”

The report further comments:

When lawyer Dong Zhengwei, a partner with Beijing-based Zhongyin law firm grabbed the headlines by alleging that Microsoft was using its dominant market share to manipulate software prices in China and calling for a US$1bn fine to be imposed on the global software giant, Microsoft global VP Zhang Yaqin was quick to reply with an interesting counter argument: “Microsoft did not even have the preconditions of conducting monopoly activities in China,” he said “genuine Microsoft products have a very low market share in China because its products are widely pirated.”

It may be a form of confirmation that major corporations need piracy at some point in their existence to gain an edge in the market. While most examples point to long-term solutions, this may be one of the few instances that it’s actually going to help the corporation in the short term.

The debate over whether or not piracy actually helps the major incumbent industries has been around for years. The timing on this, though, is interesting given that it was only late last month that Russell McOrmond an article on how software piracy actually aids proprietary software in the war between proprietary software and open source/free software.

While the excuse may be convenient for Microsoft at this point, it’s doubtful the company will be thanking software pirates afterwords if the legal argument works.

Drew Wilson on Twitter: @icecube85 and Google+.

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