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February 24, 2006

Microsoft gets formal notice of Korean antitrust decision

Posted by David Hunter at 9:47 AM ET.

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.

“We plan to deliver the notice to Microsoft as early as this weekend or by early next week at the latest,” the watchdog said.

After receiving the notice, Microsoft has 180 days to start shipping Windows in two new versions in Korea:

The commission ordered Microsoft to provide two separate versions of Windows: one stripped of the Windows Media Player and Windows Messenger, and the other carrying links to Web pages that allow consumers to download competing versions of such software from Aug. 24, 2006.

Microsoft’s response:

The Korea Fair Trade Commission report released today is one step in a long legal process, and we believe the facts will show that Microsoft’s actions have respected Korean law. It is important to note that this is not a new decision; this is simply the written report of the decision announced by the KFTC last December.

We continue to believe that the integration of media player and instant messaging capabilities in the Windows® operating system is legal and has benefited millions of Korean consumers.

The restrictions proposed by the KFTC are different and even more than those required by the European Commission. Under the KFTC restrictions, Microsoft would need to develop and distribute two new versions of Windows for Korea, including a version that has significant features removed. It remains difficult to understand how Korean consumers would benefit from such a product.

We will appeal this decision within 30 days and may request a stay.

I suppose they have to fight this to try to head off every jurisdiction that wants to mandate its own version of Windows, but surely there must be a temptation to create two new SKUS and let them sit on the shelves like Windows XP N.

Filed under Antitrust, General Business, Governmental Relations, Legal

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4 Responses to “Microsoft gets formal notice of Korean antitrust decision”

  1. Microsoft appeals Korean antitrust decision -- Microsoft News Tracker Says:

    [...] In the ongoing Korean antitrust case, Microsoft has, not unexpectedly, filed an appeal: Microsoft Corp. today filed an appeal with the Seoul High Court to review the decision in the Korea Fair Trade Commission (KFTC) case against Microsoft. The appeal is a lawsuit seeking revocation of the KFTC’s decision, which was issued last December, based on the law and facts in the case. The company has also requested reconsideration of the decision by the KFTC. [...]

  2. Microsoft loses Korean antitrust decision -- Microsoft News Tracker Says:

    [...] “Consistent with the court’s decision, Microsoft will, in a timely manner, comply with the KFTC’s order,” the Redmond, Wash.-based company said. I guess that puts an end to speculation that Microsoft might pull Windows XP from the Korean market rather than create the versions demanded by the KFTC. Microsoft had earlier lost a separate appeal directly to the KFTC. Next step (aside from complying with the KFTC ruling): Microsoft is pursuing an appeal to the KFTC’s ruling in the Seoul High Court. That is unaffected by Tuesday’s decision regarding the stay request. [...]

  3. Korean Windows versions to be unveiled on Thursday -- Microsoft News Tracker Says:

    [...] “We will supply the two separate versions of Windows to personal computer manufacturers on Aug. 24,” said Kwon Chan, a spokesman at Microsoft Korea Inc. … South Korean consumers are expected to use the new versions of Windows software in late October. Starting February next year, all personal computers sold in South Korea should be equipped with only the two new versions, local media reported. You may recall that this was required by an antitrust judgement against Microsoft in Korea and Microsoft’s request for a stay was not granted. Filed under Legal, Governmental Relations, General Business, Antitrust, Microsoft   [Permalink] [TrackBack] [...]

  4. Microsoft folds in Korean antitrust case -- Microsoft News Tracker Says:

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

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