Microsoft Responds to South Korea Fines

Microsoft Corp. Friday responded to a written report filed by the South Korea Fair Trade Commission (FTC) that outlines the agency’s December 2005 decision to fine the company and order it to offer two different versions of Windows in South Korea.

The FTC’s decision, made last December, is not supported by facts and if it is allowed to stand it will have “a negative effect on Korean consumers and Korean innovation,” Microsoft said.

Microsoft is appealing the FTC’s ruling, in which the agency fined Microsoft 33 billion won (US$32 million) and ordered the company to offer a version of Windows without Windows Media Player and Microsoft’s instant messaging software. The company also must include links to Web sites that allow consumers to download media player and messaging software from competitors in the version of Windows that includes the software.

In Friday’s statement, the company said that consumers can “easily obtain” a wide range of media player and instant messaging technologies in South Korea, and that the company has “designed Windows so consumers have the freedom to use any instant messaging services or media players they choose.”

“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,” Microsoft said. “It remains difficult to understand how Korean consumers would benefit from such a product.”

The FTC decision came following the conclusion of an investigation into Microsoft’s business practices that began in April 2005. That investigation was sparked by a complaint filed with the FTC in 2001 by South Korea’s Daum Communications Corp., as well as separate antitrust charges brought by RealNetworks Inc. in 2004.

Microsoft reached settlements with both Daum and RealNetworks, but the FTC decided to proceed with its case.

For additional CIO coverage, read Vista Raises More Antitrust Issues for Microsoft, EC Denies 2nd Microsoft Deadline Extension, MS: EU Riding ‘Roughshod’ Over its Defense and Microsoft to License Windows Source Code.

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-Elizabeth Montalbano, IDG News Service