Microsoft appeals South Korea antitrust ruling

Microsoft Corp., appealed today against a South Korean ruling that it should unbundle its media player and messaging service from its Windows software.

The world's biggest software company was ordered in December by South Korea's antitrust watchdog to make the separation or allow embedding of rival products on its system.

"Microsoft today filed an appeal with the Seoul High Court to review the decision in the Korea Fair Trade Commission (KFTC) case against Microsoft," it said in a statement.

The U.S. firm said its bundled version benefited consumers and the local technology industry, and did not block competition because South Koreans could already download easily and use a wide range of software from many other firms.

The Fair Trade Commission issued a written report of the ruling, which also fined Microsoft 32.5 billion won ($33.3 million), in late February.

Microsoft was given 30 days to appeal.

The commission began a probe into Microsoft more than four years ago after allegations raised by South Korean Internet portal Daum Communications Corp.

It pushed on with the investigation even after Daum and U.S.-based RealNetworks Inc. settled with Microsoft last year.

The ruling, which resembles a 2004 European Commission decision, held Microsoft in breach of antitrust laws by selling a version of Windows that incorporated its media player and instant messaging services, impeding competition.

Microsoft was also ordered to separate its Windows media service from its server operating system, which forced Microsoft to stop selling its existing version of Windows.

Analysts played down the impact of the legal battle.

"I think the appeal is aimed at pressuring the KFTC. Regardless of the result of the appeal, Microsoft cannot abandon South Korea, which is a leading market in Asia," said Kang Lok-hee, an analyst at Daishin Securities.


South Korea was among the top 10 markets for Microsoft globally, the company said, declining to give details.

"The appeal is a lawsuit seeking revocation of the KFTC's decision based on the law and facts in the case. The company has also requested reconsideration of the decision by the KFTC," Microsoft said in the statement.

"The restrictions imposed by the KFTC are more extreme than those required by the European Commission. Microsoft looks forward to presenting its position and is hopeful that its appeal will be successful," it added.

Analysts said the ruling would have limited ramifications beyond South Korea. The $33 million fine is the largest imposed on a foreign firm by the commission. It has given Microsoft six months to comply with the ruling.

Microsoft agreed in October to pay RealNetworks $761 million to settle an antitrust suit accusing the software giant of using its dominance to promote its own media player. Microsoft also reached a $30 million settlement with Daum Communications in November.

(Additional reporting by Kim Yeon-hee and Rhee So-eui)

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