Microsoft fined $31m by Korean watchdog

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Seoul’s anti-trust watchdog on Wednesday fined Microsoft Won33bn ($31m) for abusing its dominant position in the South Korean market and ordered the US software maker to separate its Media Player and instant messaging programmes from its operating system.

The crackdown by the Korean regulator mirrors the European Commission’s long antitrust campaign against Microsoft. The commission ruled in 2004 that the software group had broken competition law and fined it €497m.

Microsoft said it would appeal against the ruling by the Fair Trade Commission, aimed at giving Korean software groups a chance to grow.

The FTC gave Microsoft 180 days to offer two new versions of Windows in Korea, one of which must be stripped of Windows Media Player and instant messenger software. The other must have links to internet pages that allow users to download competing software products.

Kang Chul-kyu, commission chairman, said the bundling of software constituted market abuse. “Windows Media Server, Media Player and Internet Messenger services were blocking competition and leading to a monopoly ... and hurting the interests of consumers.”

“The Korea Fair Trade Commission found such tying practices liable because they constitute abuse of market dominant position and unfair trade practices under monopoly regulations and the Fair Trade Act,” said Kang Chul-kyu, commission chairman.

Microsoft last month agreed to a $30m settlement with Korea’s leading portal, Daum Communications, which brought the complaint. It also reached a $761m settlement with RealNetworks, the US-based multimedia software company, over the issue.

Both groups scrapped their complaints but the FTC continued its four-year investigation.

Microsoft on Wednesday dropped an earlier threat to withdraw Windows software from South Korea, saying it would appeal. The US Department of Justice attacked the Korean remedy as beyond what was “necessary” or appropriate” to protect consumers.

The DoJ in October fined Samsung Electronics, the Korean chipmaker, $300m for its participation in an international price-fixing conspiracy.

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