Microsoft’s Tie-In Sales Violate Fair Trade Laws According to Fair Trade Commission

It has been confirmed that the Fair Trade Commission has temporarily concluded that tie-in sales of MS Windows (a computer operation system), Media Player (a video and audio clip playing program) and Messenger (a chat program) by Microsoft are violations of fair trade laws, caused by the company’s overusing of its dominant power in the market.

The decision seems to be leading to big lawsuits because the commission is considering the imposition of tens of billions of won in fines on the giant software company and a correction order for the practice. This possible litigation concerning Microsoft’s misuse of market power follows lawsuits filed against Microsoft in May 1998 for tie-in sales of Internet Explorer, and a case in 2003 heard before the European Union Execution Committee about the combination sales of Media Player.

A senior government official said on May 3, “The Fair Trade Commission has already delivered a review in which it reveals that Microsoft’s tie-in sales violate fair trade laws, to the company.”

The agency asked Microsoft to submit explanatory reports within two months and is planning to make a final decision on the extent of the correction order and fines.

The catalyst for the investigation occurred when Daum Communications Corp. and RealNetworks Inc., a software company making media-playing programs, sued Microsoft. The former filed a lawsuit against the tie-in sales of Messenger and a computer operation system by Microsoft in September 2001. The latter sued Microsoft for its combination sales of Media Player and Windows XP, and a media server program (a program sending music and movie files to receivers) and a computer operation system.

A working-level official of the Fair Trade Commission allegedly estimated the fines imposed on Microsoft could be in the tens of billions of won.

In response, the company said, “It is a general trend to integrate various programs into a computer operation system in the software industry,” and added, “Microsoft will respond in a justifiable way if there are serious problems in the final decision of the commission.”