Microsoft to negotiate settlement with Taiwan

The Fair Trade Commission has agreed to negotiate a settlement with Microsoft over the US software giant's allegedly unfair trade practices in Taiwan.

Microsoft requested the negotiations last week, after six months of investigations.

After a four-hour meeting yesterday, the commission's vice chairman, Chen Chi-yuan (陳紀元), said the commission had so far come to no conclusions about Microsoft's conduct.

"To solve the dispute, we therefore have agreed in principle to accept Microsoft's request to begin the procedure of administrative settlement," Chen said.

The commission will stop its probe and start negotiations with the company, Chen said, which will be finalized as soon as possible.

In May, the commission began investigating Microsoft's alleged abuse of its dominance of the software market to manipulate prices.

The commission investigated Microsoft's pricing policy and consumers' complaints that Microsoft forced them to buy bundled products.

According to Chen, Microsoft is required to present a proposal and terms for a settlement within 30 days after it receives a written notice, which will be sent on Nov. 4 at the latest.

The commission will evaluate whether the terms "serve the best public interest," Chen said. If negotiations fail, the commission has the authority to re-open the investigation, Chen said.

Chen declined to specify whether price cuts by Microsoft will be included in the negotiations.

Microsoft Taiwan last night responded in a statement that its business conduct was in accordance with Taiwan's regulations and it would uphold the public interest in proposing the terms for an administrative settlement.

However, the company declined to say whether it will propose lowering its prices, stressing that its software prices in Taiwan are set at a global standard.

Mark Chang (張至剛), secretary-general of the Consumers' Foundation (消基會), said yesterday that software prices in Taiwan are much higher than in other countries.

"The commission should take advantage of this chance to ask Microsoft to lower its prices or provide preferential software packages to frequent users," he said. "Otherwise, customers will boycott software which is priced unreasonably."

If Microsoft's practices are ultimately found to be illegal, it could be fined up to NT$25 million for each violation, Chen said.