June 19 (Bloomberg) -- China's intellectual-property rights enforcer said the government isn't probing Microsoft Corp. for breaching antitrust laws, denying yesterday report by a state- owned newspaper.

The government office had begun an anti-monopoly probe against the world's largest software producer, state-run Shanghai Securities News said yesterday, citing an unidentified person familiar with the situation. Companies are expected to sue Microsoft after a law takes effect in August, the newspaper said.

``We are not conducting an anti-monopoly investigation against Microsoft and have no plans to do so,'' Yin Xintian, a spokesman and legal director at the State Intellectual Property Office, said by telephone today in Beijing. The newspaper's report is ``completely untrue,'' the agency said on its Web site. ``We did commission a study into the frequency of China's software piracy and published the results on May 28.''

Microsoft said yesterday it wasn't aware of any such investigation.

``Microsoft fully supports China's efforts to establishing an environment conducive to promoting fair competition,'' the Redmond, Washington-based company said in an e-mailed statement. China's anti-monopoly law ``will better safeguard interests and benefits of consumers, encourage innovation and enhance economic development,'' Microsoft said.

Protecting Home Industries

China's first anti-monopoly law, which has taken 13 years to draft, will come into force on Aug. 1, after it was passed last year by the legislature. The Chinese government is strengthening laws to help local companies compete as the nation opened its markets after its 2001 membership in the World Trade Organization, which ended various preferential policies for domestic firms.

China has tightened control of foreign takeovers amid increasing criticism that overseas companies have gained dominance in some industries.

European Union regulators in February fined Microsoft a record 899 million euros ($1.4 billion) for failing to comply with a 2004 antitrust order, the largest EU fine ever imposed against a single company. The fine brings the total penalties against Microsoft to 1.68 billion euros in the case.

Microsoft was previously fined 778 million euros for abusing its dominance in the software market and failing to abide by the antitrust decision.

Microsoft shares fell 1.2 percent to $28.46 yesterday in Nasdaq Stock Market trading.

To contact the reporter on this story: Janet Ong in Beijing at jong3@bloomberg.net

Last Updated: June 19, 2008 01:29 EDT