South Korean antitrust panel fines Microsoft

GWACHEON, South Korea — South Korea's antitrust watchdog fined Microsoft $32 million for alleged unfair business practices and ordered it to take corrective measures such as separating certain software from its Windows operating system and selling the software of competitors along with it.

Microsoft had earlier warned such a ruling might force it to stop selling the software in South Korea. But a company official early today said Microsoft does not intend to withdraw Windows.

Microsoft was considering an appeal against the ruling by the Fair Trade Commission, the official in Seoul said by telephone.

"We have an option to appeal the ruling," said the official, who declined to be named. He said a statement would be released soon.

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

"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 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 have links to Web pages that allow users to download competing versions of such software, the commission said.

The corrective measures will remain effective for 10 years.

After five 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.

The European Union ordered Microsoft in March 2004 to pay a fine of more than $600 million, share code with rivals and offer a version of Windows without Media Player software.

Microsoft is appealing that ruling.

Reuters contributed information about Microsoft's response.