The Corporate Complicity Scorecard gave Microsoft an overall "F" grade for its technological support of China's government and military, as well as exposure to forced labor in its supply chain.
The scorecard is an assessment of U.S. Companies’ collaboration with military modernization, government surveillance, and human rights violations in the People’s Republic of China. The report was funded by the Victims of Communism Memorial Foundation and Horizon Advisory.
According to the study, corporate support for Beijing’s military modernization, surveillance state, and human rights abuses were displayed in five main ways; offshoring of manufacturing that exposes U.S. industrial chains to forced labor and other human rights atrocities in China; the offshoring of innovation; partnerships and engagements with Chinese government entities that support military and surveillance-relevant systems; compliance with Beijing’s regulatory system that makes U.S. industry a conduit for the Chinese government’s collection of information; and dependencies on the Chinese market that make U.S. industry a conduit for Chinese influence and propaganda abroad.
Several themes emerged from the report of the profiled companies, including findings that American businesses are often hypocritical as they will say one thing in the U.S. and do another in China, and several companies have supported offshore research and development, which could threaten American innovation.
According to the report, U.S. defense contractors also partner with Chinese government and military-tied entities.
In 1998, Microsoft Research Asia became the company's largest and most comprehensive R&D facility outside the U.S. Microsoft Asia created the Innovation Hub in 2017 as a center for the company to collaborate with the Chinese government, its military, and around 50 Chinese companies, some state-owned, the report stated.
The U.S. Commerce Department listed one of Microsoft's joint venture partners as a Chinese state-owned defense conglomerate with direct links to the Chinese military, according to the report. Among other findings, Microsoft's Chinese partners and suppliers have also been identified as companies involved in forced labor in Xinjiang. This comes as China reportedly uses Microsoft-developed technologies in its domestic surveillance program.
In 2021, Microsoft announced plans to open four new data centers in China. These centers will be operated by its Chinese partner company, 21 Vianet, China’s leading third-party data operator, the report stated. The company has strong connections with the Chinese government as they directly inform and guide the Ministry of Industry and Information Technology (MIIT).
Microsoft also entered a partnership with the China Electronic Technology Company (CETC), which is a state-owned Chinese defense conglomerate, the report found. Microsoft and CETC launched a custom version of the Windows 10 software for exclusive use by the Chinese government. The U.S. Department of Defense also found that CETC has a direct link to the Chinese military.
According to Top10VPN, a virtual private network review site, whose stated mission is the protection of digital privacy, Microsoft has a partnership with Haiyi Software and Beijing Zhongke Fuxing Information Technology. Both companies produce surveillance and censorship product software which have been used to further China's domestic surveillance programs.
The Australian Strategic Policy Institute also claimed several of Microsoft's suppliers have links to forced labor, including Hubei Yihong Precision, Foxconn, O-Film Manufacturing Company, and Goertek Ink.