Update: China now says it is not investigating Microsoft. See the note at the bottom of this article for details.

China has begun an antitrust investigation of Microsoft in advance of an August 1 anti-monopoly law coming into effect in that country. China, which is home to the most egregious software piracy on earth, says it is investigating why Microsoft's Windows and Office products are so expensive there.

"Our departments are carrying out the investigation," a spokesperson for China's State Intellectual Property Office told the Associated Press. "We will release the findings later."

According to the State Intellectual Property Office, the cost of Windows and Office often exceeds the cost of a PC in China. A working committee will also examine Microsoft's bundling of applications with Windows as well.

China passed its anti-monopoly law last year, requiring, among other things, that Chinese companies cannot be purchased by companies from other countries if the purchase represents a national security risk or establishes a monopoly. A China-based research firm claimed last year that piracy in China was so rampant there because software prices are too high. Arguably, the fact that the Chinese government has completely ignored piracy over the years is at least as big a reason.

China is apparently investigating other software companies as well. No other companies have yet been identified, however.

UPDATE: China Denies Microsoft Probe
In the wake of reports that China is investigating Microsoft for over-charging for software, the country announced this morning that such reports are "seriously untrue." The reports originated with China's state-run newspaper Shanghai Securities News, and the Associated Press, the latter of which quoted a State Intellectual Property Office spokesperson describing the investigation.

"Our office has never conducted research on monopoly behavior aimed at any enterprises," a State Intellectual Property Office notice reads. "And at present we have no plan to conduct this work.