Microsoft Settles Korean Antitrust Case

Channy writes Microsoft announced on last Friday that it had reached a settlement with South Korean Internet portal Daum in antitrust case of IM bundling. Daum had complained to the South Korean Fair Trade Commission in 2001, accusing Microsoft of breaking the law by tying its instant messaging software to Windows. A lawsuit on the same grounds was filed in 2004. By the settlement, Microsoft will pay Daum $30 million, including $10 million in cash. In return, Daum would drop its lawsuit. Before this decision, Microsoft has threatened to withdraw its Windows software from South Korea if the country's antitrust agency orders it to unbundle its instant-messaging and media player software from the operating system. Despite this settlement, KFTC announced plans to continue investigation of this case and conclude the final decision within this year."

When is Microsoft not being sued?

Is it me, or is everywhere I turn a lawsuit against Microsoft, in some form?

no windows in South Korea?

wow...good going threatening extreme stability for the South Korean computer industry.

Where's the 20M$

Microsoft will pay Daum $30 million, including $10 million in cash

Where's the 20M$ remaining? Are they paying in licenses? Again? How long before MS licenses are on the forex rates?

Re:Where's the 20M$

The remaning $20 million will be paid out in "Microsoft Fun Bucks", little blue and green notes with pictures of smiling MS execs on them. These can be used to purcahse certian Microsoft products, food at the MS headquarters cafeteria and items at the MS giftshop.

At current rates, $20 million in MS fun bucks can purchase 4 force feedback joysticks, a copy of 'Age of Empries, 10 Microsoft branded tote bags and a dozen MS ballpoint pens. With enough left over for a cheese and mushroom omlet at the cafeteria.

How does that work?

Microsoft will pay Daum $30 million, including $10 million in cash.

So.. the other $20M will be in the form of an NSF cheque?

And when is the drop for the cash going down? Is the $10M going to be in small, non-sequentially numbered, unmarked bills?

is it profitable?

I mean, how much money they would be getting anyway from all those windows copies sold in Korea? My bet, is that's just their investment in their "world damination project".

otherwise how would it look like if whole Korea switched off windows?

Re:is it profitable?

I know that's a typo. The question is, did you mean "world domination project", or "world damnation project"?

This is MS - is there a difference? :o)

This should drive China to Linux

I'm sure that Chinese officials are taking one look at Microsoft's threat to withdraw from Korea and realizing that they don't want China to depend on such a capricious foreign vendor.

What will happen when China stops using Windows and also becomes the leading maker and buyer of PCs? Companies that do business with China (and most do) will see less and less advantages in staying 100% Windows and less and less likely to buy Microsoft's nonstandard applications.

Re:This should drive China to Linux

a) linux is already quite popular in china already, ffs, they have their own distro :D

b) and after several years, the remaining linux howtos will only be understandable when you are able to read Chinese.
lucklily that will take quite some years, unless the assassinate the leading kernel/kde/gnome developers and install liu touva & other dudes named like that in place. instead you should be affraid china forking their own linux project all together and the mess that this will create (and they will rename it to Leenux)

c) with the corruption and illegal action rates currently in china, not even the forbidding order from the goverment can stop windows from being pirated there all over the place.

d) imagine the power of developers currently kept back behind the "china's wall". there may be a next "einstein of code" hidden there.

Re:This should drive China to Linux

This isn't the first drive, and this isn't the last. From this article [geek.com]:

The bad news for Microsoft: China decided to do this by switching to Chinese companies, many of which develop for Linux.

And what is interesting about this article? Check the date: Wed Jan 09 2002

If you can't win them, pay them :-)

It used to be if "you can't win, join them" it seems that Microsoft has redefined it :-)

Gosh, they may even patent it as a business practice !!

consumers

By the settlement, Microsoft will pay Daum $30 million, including $10 million in cash. In return, Daum would drop its lawsuit.

OK, but "justice has not been served". The problem of unfairly putting Microsoft's IM client in a favorable light is still there, and this company will still lose their market share to them, and consumers will still be worse off for having lost some competition.

Winner: The one with the deepest pockets! Subverting the not-quite-free-market to hurt consumers everywhere!

Far less than $30mil

$10 million cash payment by Microsoft to Daum, $10 million in advertising deals and unspecified business terms worth a further $10 million.

So that's only really $10mil. The advertising probably won't cost MS much (they probably couldn't sell it for $10mil to anyone else - they wouldn't advertise a competitor anywhere noticeable anyway), and "unspecified business terms"? That's just giving MS more business - even if they don't make money from it, they won't lose much (they have to employ all their people anyway - might as well keep them busy).

So Daum gain $30mil, prehaps, but MS don't lose anywhere near that much. I don't know South Korean law, but I expect they could have won far more if they'd gone to court.

So...

$10 million in Korean dollars is what -- like seventy-three cents?

How much difference does this make?

After all, Microsoft is in a position to throw money around like 50 Cent in a rap video. This is simply a payment to make their problems not only go away in Korea, but to keep other countries from thinking that they can investigate Microsoft in the same way. The fact that the Koreans still want to investigate them is ecouraging, but not really meaningful IMHO.

There's nothing to see here. Move along.

...so the bottom line is...

...that M$ continues to bundle, just like before. I have come to one conclusion. Courts in Korea are just as inept as those in this USA. Sad indeed.

Microsoft just never seems to run out of money

Just a while ago Microsoft had settled a lawsuit with Real Networks for $761 million. $256 million just went to malaria research from the Gates foundation. Is 30 million realy a big issue for Microsoft?. Its probably Bill Gates' wife missing 2 days grocery shopping. It makes sense why Microsoft would pay even after threatening to government to 'Withdraw Windows from the Korean Market' if the government did not comply with Bill Gates rules. Funny how eventualy Bill Gates will have more power than smaller governments, and the day is not far when we shall see news articles like 'Bill Gates urges Israel to re-write its constitution allowing more political power to the already predominantly Microsoft based computer economy in the country'. A few weeks ago Bill Gates had made a statement in Israel declaring war on google. Just think about it for a while. Bill Gates goes to a war infested country to say 'I am declaring war on Google, are ya with me folks?'.

This is so frightening...

Microsoft has threatened to withdraw its Windows software from South Korea if the country's antitrust agency orders it to unbundle its instant-messaging and media player software from the operating system.

Spooky.

Implications for MA OpenDoc case

Massachussets is involved in a case with Microsoft over the future of digital documents. MA has made it a requirement that all records be stored in a completely open digital format, and have recommended that the OpenDoc standard qualifies (along with Adobe's PDF) and that Microsoft's new MSXML doesn't.

Microsoft is imposing some restrictions on the MSXML format -- and it would appear that they might be able to change those restrictions at some future time.

If they are willing to cut off an entire country, then potentially it may be impossible legally to read and modify that country's documents. Massachussets has to be aware that if it could happen to Korea, it could potentially happen to MA if they are too uppity.

We'll see if Massachussets officials can withstand the full-court press of Microsoft's hard-bought political muscle, but if anything should give those officials some backbone, it's this kind of nonsense.

Thad Beier

Beneficiaries

From the article: "Analysts say the payment would alleviate a cash shortage at Daum, which acquired Lycos Inc. last year and has been suffering heavy costs linked to restructuring efforts at the U.S. portal."

So, what was this lawsuit about? How does this settlement help anybody but Daum and Microsoft? I'm glad the KFTC is still looking into this; there doesn't seem to have been any real improvement in the Korean market through this settlement, or any wins for the end user (unless you're a Daum shareholder).

Mod me troll if you want

But I personally see no problem with bundling their client with the operating system, or even the media player for that matter. Most users use the computer as an appliance, they want it to just work. They dont want to go find an IM client and media player and install it, they expect it to just be there. If you dont like it, remove access to it via GPEDIT.

What I DO have a problem with is the amount of "digging" the average person has to do to find a way to remove them if they dont want them there.

Re:Mod me troll if you want

Apple bundles an IM client with Mac OS X. Guess what though? It's just bundled - that's all. If you don't want to use it, you can simply ignore it, or drag it to the Trash without ever opening it.

Microsoft's IM client isn't just bundled: it launches automatically every time you load Windows, pops up with an alert telling you to sign up for an account, and stays in your taskbar unless you know how to get rid of it (the average user doesn't know how).

Also, Apple doesn't run their own IM network; their client works with AIM and Jabber, and doesn't display advertisements. You can use Apple's client to connect to a third-party network without registering with Apple for anything.

MS Messenger vs. Apple Quicktime iChat

Does this mean that Apple will have to unbundle Quicktime from Tiger if it ever ships to South Korea or other countries with anti-trust laws as well?

New Solution to compliment MSFT's decision

Microsoft Gives Daum $30Million, South Korea switches to Ubuntu. $30Mil would buy what, 60,000 computers that could run Ubuntu smoothly? (monitor included) And they could choose whether or not to install an instant messenger application!

A Skit:

• MSFT: Here, have an OS with all sorts of non-OS software packaged in.
• Daum: But we don't want non-OS software, it's against our laws to force us.
• MSFT: Freedom is overrated, too bad.
• Daum: /me files lawsuit.
• MSFT /me plays a violin.
• Linspire: Here is a free OS I'd be willing to sell for cheap, and it looks like Windows but doesn't violate any of your laws.
• S.Korea: Hmmmm.....
• MSFT: $30Million ($10 in cash... for some reason)
• Daum: *shrug* Okay.
• Lawsuit: /leave

Didn't linspire

offer to provide their OS to all of Korea for $5 million? http://linux.slashdot.org/article.pl?sid=05/11/05/ 0749253&tid=109&tid=106&tid=219 [slashdot.org]

Big Business, indeed

Personally, I don't really like the idea that some companies now are big enough to try to extort a mid-sized country. If I were South Korea, I'd really be worried what other global players might do in a few years time.

I guess this is one of the reasons why the European Union exists. One country alone, if it isn't a really big one like the US, is simply too small a market to matter to the global players if you annoy them too much. AFAIK, Microsoft never threatened to withdraw their products from the European market during the antitrust proceedings there.

For fuck's sake...

It's their damn OS, let them bundle whatever the fuck they want.

Banning the ability to install other IM clients is anti-competitive, not merely bundling.

Let's sue Apple for bundling their programs into their OS.

Jesus christ people, at least be consistent.

Barbarians in the Gates

Seoul has been staring down an insane tyrant hellbent on invading for a halfcentury. Maybe they won't blink while keeping an eye on Microsoft, which has already infiltrated.

Stupid.

Why is legal to say "Here's some money, forget I broke the law." ?

Insane

You know a company has gotten too big when it can threaten a country.

Another BS Case

I see nothing wrong with bundling software.

How many of us would care things like an LCD screen with GPS tracking, CD/MP3 player deck, temperature controlled environment, carpets, rear view cameras on the car were standard in a car.

Why not in an OS? Cause its MS? Its their OS, they have a right to put what they want and sell it just as much as GM, Honda or Toyota does.

'The consumer would like a choice' argument doesn't work here because most avg consumers want something that just works.

Catching flies with honey instead of vinegar...

Reaching a "settlement" is just another way of saying that Microsoft is not going to just give up on a country, as much as their legal/PR team wants to say that they would have no problem taking their toys and leaving S. Korea. Instead of having to back up their threat to leave S. Korea, they are just trying another tactic by settling with them (read: bribing). Because if Microsoft does leave, the flip side is that the other countries that are really tired of Microsoft's strong-arm tactics will suddenly witness *HOW* to get rid of Microsoft from their native soil - something that Microsoft, already embattled and pressured by Linux, does not truly want to see happening.

Re:In Korea..

No ! In Korea Windows runs old people. All the old people. The only question is the age at which a person is considered to be old. There are many answers which have been put forward in response to this question. 73.2% of them are expressed in single figures.