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Thu, Oct 13, 2005 - Page 12 News List

S Korean watchdog says Microsoft still in its sights

NOT DONE Despite the software giant's settlement of a US antitrust case, South Korea's Fair Trade Commission says it will continue to probe allegations of unfair trade practices

AP , SEOUL AND LUXEMBOURG

Microsoft Corp chairman Bill Gates listens to questions on Tuesday in Seattle after announcing that Microsoft had reached a broad antitrust settlement with digital media pioneer and longtime foe RealNetworks Inc worth US$761 million.

PHOTO: AP

South Korea's antitrust watchdog said yesterday that it would continue to investigate allegations that Microsoft Corp engaged in unfair trade practices, despite the software giant's settlement of a case with a US rival.

RealNetworks Inc announced on Tuesday a US$761 million legal settlement with its longtime adversary that ends all their antitrust disputes worldwide, including in South Korea.

The deal also aims to help the two companies better compete against Apple Computer Inc in the increasingly important business of online audio and video.

The settlement starts with a US$460 million cash payment that settles all antitrust disputes worldwide that RealNetworks had against Microsoft.

RealNetworks also gets US$301 million in cash and services -- including promotion on Microsoft Web sites and the software giant's instant-messaging service -- that are designed to help its products reach a wider audience.

Seattle-based RealNetworks sued in December 2003, accusing Redmond, Washington-based Microsoft of illegally forcing Windows users to accept Microsoft's digital Media Player. RealNetworks said its own player suffered as a result.

South Korea's Fair Trade Commission issued a statement saying it is "investigating this case for the sake of consumer protection and national economic development. Therefore, RealNetworks' dropping of its complaint won't affect the FTC's investigation at all."

Microsoft's problems in South Korea began in 2001 when Daum Communications Corp, a South Korean Internet portal, alleged that Microsoft violated trade rules by tying its instant messenger software to Windows.

Regulators widened the investigation last year after RealNetworks filed a complaint to the commission alleging Microsoft was undermining competition in the market by tying its Media Player and Media Server software to Windows.

Microsoft's remaining opponents in the EU legal case also say that a settlement between the software giant and RealNetworks resolving their antitrust disputes will not deter the EU from proceeding.

The settlement will be "completely irrelevant," EU spokesman Jonathan Todd said.

"We will continue to ensure full and complete compliance with the March 2004 decision. The role of the commission is to ensure the proper application of EU competition law for the benefit of consumers and companies in Europe," Todd said.

The EU ordered Microsoft in March last year to pay euro 497 million (US$597 million), share code with rivals and offer an unbundled version of Windows without the Media Player software.

The Court of First Instance, the EU's second-highest court, has not yet set a date to hear Microsoft's appeal.

The Microsoft-RealNetworks deal is the latest in a peace offensive Microsoft has launched in recent years, following an antitrust settlement with the US Justice Department.

The peacemaking has cost the cash-rich company several billion dollars but also led to better cooperation with some formerly bitter rivals.

In July, Microsoft reached an US$850 million deal with International Business Machines Corp. That followed a US$1.6 billion settlement with Sun Microsystems Inc last year and a US$750 million truce with America Online, part of Time Warner Inc, in 2003.

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