South Korea Watchdog Fines Microsoft $32M

GWACHEON, South Korea - South Korean antitrust regulators ruled Wednesday that Microsoft Corp. abused its market dominance, fined it 33 billion won ($32 million) and ordered the software giant to offer alternative versions of Windows. Microsoft said it will appeal the decision in court.

"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," Kang Chul-kyu, the commission's chairman, told reporters.

The ruling comes after the U.S. software giant reached separate settlements with companies that then withdrew the complaints that led to the investigation. The companies had complained that Microsoft violated trade rules by tying its instant messenger software to Windows.

The commission ordered Microsoft to offer two versions of Windows in
South Korea within 180 days.

One version must be stripped of the Windows Media Player and Instant Messenger software, while the other version must come with links to Web pages that allow consumers to download competing versions of such software, the commission said.

The corrective measures will remain effective for 10 years and after 5 years, Microsoft will have the opportunity each year to request a review of the remedy to account for changes in the market environment, the commission said.

"We are very disappointed with the commission's decision," said Tom Burt, a Microsoft vice president and deputy general counsel. "Ultimately, we will file a lawsuit in Korean court challenging the decision."

The European Union ordered Microsoft in March 2004 to pay 497 million euros, share code with rivals and offer a version of Windows without Media Player software. Microsoft is appealing that ruling.