Microsoft Files Formal Korea Fair Trade Appeal

Microsoft filed a formal appeal of South Korea’s Fair Trade Commission (FTC) antitrust ruling that, like the European Union, demands two versions of Windows for consumers.

The move follows a preliminary government edict from last February, which finalized an earlier ruling imposing a nearly $32 million fine, plus demands the software giant offer two versions of its Windows operating system.

Already embroiled in an antitrust lawsuit with European regulators, Microsoft said the Korean ruling would stifle competition and possibly take Windows out of the hands of consumers.

The South Korean FTC said Microsoft must provide that country’s consumers two versions of Windows: one minus Windows Media Player and Windows Messenger and another version that includes links to third-party media and IM software.

In rejecting the ruling, Microsoft said its practices are “consistent with Korean law and have benefited Korean consumers and the Korean technology industry,” according to a statement by the company. Microsoft said its appeal is in the best interest of Korean consumers.

Koreans can already “easily download and use a wide range of software from many different companies,” said Jae Hoon Chung, Microsoft’s Korea senior attorney, in a statement. Chung also said Korean consumers are using multiple media and IM software clients. The Korean ruling would erode global competitiveness, according to Microsoft.

The software giant also said the South Korean ruling could mean Microsoft “would no longer be able to offer in Korea the existing version of Windows” available elsewhere, according to a statement.

Microsoft has earlier said it might the Korean market due to the antitrust lawsuit.

Microsoft charged Korea’s demands are harsher than a European decision which also revolves around bundling of Windows Media Player.

“The restrictions imposed by the Korean FTC are different and even more restrictive than those required by the European Commission,” according to Microsoft.

Since 2004, when Europe declared Microsoft violated antitrust laws, fining the software company $613 million and ruling Microsoft must open Windows to rivals, the two have traded barbs over compliance.

In an effort to appease the EU and stick with the demands of the antitrust, the software company last year released Windows XP “N,” a version omitting Windows Media Player. Microsoft did not comment on whether it might create a similar product for the Korean market.

South Korean regulators believe Windows, with bundled media and IM applications, has hurt local software providers. As previously reported, the market share of IM services from Daum Messenger and Nate-On Messenger fell after MSN Messenger was bundled with Windows.

A similar result was seen when Windows Media Player (WMP) was bundled with the Microsoft OS. Prior to bundling, in Dec. 2000, WMP held a slight lead over rival Real Network. After the bundling, WMP’s share leapt to 60 percent while Real plummeted to 5 percent, as was previously reported.

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