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October 17, 2007

Microsoft folds in Korean antitrust case

Posted by David Hunter at 8:53 PM ET.

Microsoft has withdrawn its appeal of the 2006 judgement against it by the South Korean Fair Trade Commission thereby effectively ending the dispute.

South Korea’s antitrust regulator said on Wednesday it has agreed to allow Microsoft (MSFT.O) to drop its appeal against the agency’s landmark ruling, ending a two-year dispute.

The Korean Fair Trade Commission (KFTC) ruled in 2005 that Microsoft had abused its dominant market position, fining it 32.5 billion won ($35.43 million) and ordering it to separate its instant messaging program from the Windows operating system.

The KFTC had rejected a direct appeal and in a subsequent appeal to the Seoul High Court the required remedies were not stayed so Microsoft had already provided the required Korean versions of Windows XP and Vista. Thus all that was left was to grin and shrug and stop paying all the legal bills:

The company “remains committed” to the South Korean market and will “work closely with KFTC to ensure that Korean consumers benefit from vibrant competition in the IT industry,” Microsoft added.

While certainly less satisfying than the talk of stopping Windows shipments in Korea, this settlement seems based on an accurate calculation of cost versus benefit. If Microsoft is going to enhance its dominant PC operating system by bundling software applications, it is not surprising that third party vendors of similar applications will run crying to their local antitrust regulators. All it ever seems to cost Microsoft is an occasional fine and goofy unbundled version of the operating system, so it’s just a cost of doing very good business.

Filed under Antitrust, General Business, Governmental Relations, Legal, Microsoft, OS - Client, Windows Vista, Windows XP

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