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Microsoft said on Tuesday that a blogging application posted to its MSN China site did in fact copy code from a rival.
Microblogging site Plurk lashed out at Microsoft on Monday saying that the Juku application stole its user interface and code. Microsoft said on Monday that it was investigating the matter and suspended the Juku service on Monday night.
Microsoft has said a third party and not it or its Chinese joint venture partner wrote the Juku program.
"The vendor has now acknowledged that a portion of the code they provided was indeed copied," Microsoft said in a statement. "This was in clear violation of the vendor's contract with the MSN China joint venture, and equally inconsistent with Microsoft's policies respecting intellectual property."
Microsoft said it is now suspending access to the Juku beta "indefinitely."
"We are obviously very disappointed, but we assume responsibility for this situation," Microsoft said. "We apologize to Plurk and we will be reaching out to them directly to explain what happened and the steps we have taken to resolve the situation."
Plurk has not said what, if any, action it will take against Microsoft. In a blog posting on Monday, it said it is still evaluating its options.
"We're still in shock asking why Microsoft would even stoop to this level of willfully plagiarizing a young and innovative upstart's work rather than reach out to us or innovate on their own terms," Plurk said in the blog.
It's the second time in recent weeks that Microsoft has been accused of lifting code. It was forced to pull a Windows 7 download tool after that product was found to contain open-source code. Microsoft blamed a third-party vendor in that case as well.
The company also said it and its Chinese joint venture "will be taking a look at our practices around applications code provided by third-party vendors."