October 16, 2007 9:04 am

Microsoft drops Korean antitrust appeal

Microsoft has dropped its appeal against an antitrust ruling in South Korea after losing a similar case in Europe last month.

The world’s biggest software group sent a formal request to the Seoul High Court last week to withdraw its appeal of a ruling by the country’s antitrust watchdog requiring Microsoft to unbundle its operating system and pay a Won33bn fine for abusing its dominant market position in Korea.

”Microsoft dropped its appeal against our decision,” said a spokesman at the Korean Fair Trade Commission. He added that the case would come to an end unless the FTC takes action in the next two weeks to continue the appeals court trial. The KFTC has yet to decide on its response.

The US company had released new versions of its Windows operating system in South Korea after the KFTC last year ordered that its Media Player and instant messaging programmes be separated from its operating system, but the company had also appealed the ruling.

”Microsoft has sought to withdraw its appeal,” the company said in a statement Tuesday. ”We are working with the KFTC and the Seoul High Court, but because the matter is pending before the court, we cannot comment further.”

The move was announced a day before the appellate court in Seoul had been originally scheduled to make a ruling. Microsoft is under increasing pressure after a top European Union court last month upheld Brussels’ 2004 competition ruling that found the company guilty of abusing its dominant market position. In the landmark ruling, the company was fined a record €497m and ordered to change its business practices.

The KFTC investigation began after a complaint by Korea’s leading web portal, Daum Communications, which later scrapped its objection after agreeing a $30m settlement with Microsoft.

Analysts said Microsoft faces the threat of fresh antitrust probes and escalating financial penalties after its European court defeat.

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