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December 7, 2005

Korea fines Microsoft, mandates new Windows versions

Posted by David Hunter at 9:08 AM ET.

It was the worst possible outcome in the S. Korean antitrust case. Kim Yeon-hee and Lee Shin-hyung at Reuters:

Microsoft Corp. was ordered to separate its instant messaging service from its Windows software and allow rival products on its system in South Korea after losing an antitrust case on Wednesday.

The U.S. software firm, which was also fined about $32 million, said it would appeal the decision by South Korea’s Fair Trade Commission (FTC) but did not plan to make good on a threat to withdraw its Windows operating system from the country.

The ruling, which resembles a 2004 European Commission decision, held Microsoft breached antitrust laws by selling a Windows version that incorporated its instant messaging software.

“Windows’ Media Server, Media Player and Internet Messenger services were blocking competition and leading to a monopoly in the market, as well as raising the entry barriers to PC server and operating system makers, hurting the interest of consumers,” said FTC Chairman Kang Chul-kyu at a news briefing.

Analysts said the ruling would have limited ramifications beyond South Korea.

Microsoft statement:

We disagree with the Commission’s decision and strongly believe that Microsoft has operated within Korean law.

Microsoft’s integration of instant messaging and media player functionality in Windows has created great value for consumers and opportunities for Korean developers who write applications that run on Windows and create devices for Windows.

Competition in these technologies in Korea has been, and remains, vibrant with many new Korean companies successfully offering digital media and instant messaging choices for Korean consumers. This decision could have the effect of chilling innovation in Korea.

We intend to appeal this decision because it is inconsistent with Korean law. Nevertheless, we will continue developing products for Korean consumers in a way that complies with all laws and is pro-competitive. Microsoft has long felt that Korea is an important center of innovation for our industry. We remain committed to Korea and look forward to continuing to serve the interests of Korean consumers as well as the rest of the Korean information technology industry.

Now for a lengthy series of appeals and possibly a version of Windows that no one will buy, just as in the EU case.



Filed under Antitrust, Governmental Relations, Legal

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2 Responses to “Korea fines Microsoft, mandates new Windows versions”

  1. Microsoft News Tracker » Kissinger, Congressmen lobby for Microsoft in Korea Says:

    [...] Frankly, this is business as usual. Microsoft apparently asked for some help when the Korean antitrust case got hot in December and the Korean FTC imposed fines and mandated two separate Korean versions of Windows. Kissinger has lobbied for other companies and the US Department of Justice had also weighed in on Microsoft’s behalf. [...]

  2. Microsoft News Tracker » Microsoft gets formal notice of Korean antitrust decision Says:

    [...] Completing the formalities surrounding its December antitrust ruling, the Korean Fair Trade Commission is formally notifying Microsoft of the ruling and the imposed penalties: South Korea’s antitrust watchdog said Thursday that it plans to send software giant Microsoft a formal notice of its violation of the nation’s fair trade rules by early next week at the latest. On Dec. 7, the Fair Trade Commission (FTC) fined Microsoft 33 billion won ($33.8 million) for bundling its Media Player program and MSN instant messenger into its near-ubiquitous personal computer operating system Windows. [...]

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