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Wednesday, December 07, 2005
S. Korea Fines Microsoft for Antitrust Violations


South Korean antitrust regulator ordered Wednesday Microsoft to pay $32 million in fines for its violations of fair trade rules.

The S. Korean Fair Trade Commission also ordered Microsoft to separate its MSN instant messenger and Media Server programs from its operating system Windows.

The "corrective measure" will last over the next 10 years, the commission said in a statement. FTC will monitor Microsoft to see whether the U.S. company implements the order to separate the bundling programs from Windows.

The commission initially ordered Microsoft to split the Media Server software from Windows within 180 days of the ruling.

"Microsoft's practice of bundling programs into Windows have hurt consumers' interest by limiting fair market competition," said FTC Chairman Kang Chul-kyu in a press briefing.

Microsoft was also ordered to sell two versions of its Windows operating system -- one without the Media Player and MSN messenger programs and another bundled with the two programs.

The South Korean ruling against Microsoft came nearly 20 months after the European Union ordered the U.S. software giant in March 2004 to pay 497 million euros ($586 million) and to strip its Media Player software from some versions of Windows. Microsoft is appealing the EU ruling.

Microsoft and the South Korean regulator have been in a dispute since September 2001, when local Internet portal Daum Communications Corp. lodged a complaint with the commission over the U.S. company's bundling of its instant messenger software with some versions of its dominant Windows operating system.

FTC's investigation was widened after U.S. software company RealNetworks filed a complaint with the commission in November 2004, condemning Microsoft for tying its audio and video software with Windows, allowing the company to have an unfair advantage over rival music and video software companies.

However, both Daum and RealNetworks dropped their suits in South Korea after settling with Microsoft for money.

On Nov. 11, the U.S. software powerhouse said it has reached a settlement with Daum over the antitrust dispute for a total of US$30 million. About a month ago, Microsoft announced an out-of-court settlement with RealNetworks in return for paying the rival company $761 million.

The settlements, however, were not affected by the FTC's investigation into the charges of antitrust violation here, the commission has said.


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