S. Korean regulator rejects Microsoft appeal

South Korea's antitrust regulator on Tuesday rejected an appeal by Microsoft Corp. to reconsider punitive measures for the bundling of its MSN messenger and media player with its Windows operating system.

The Fair Trade Commission (FTC) said it decided to maintain its fine of 32.49 billion won (US$34.11 million) on the U.S. software giant.

"Microsoft must take steps to provide consumers with two versions of its Windows system as stated in the original corrective order," the watchdog said.

In a final decision announced on Feb. 24, the FTC ruled Microsoft should produce one Windows operating system that does not include MSN Messenger and Windows Media Player, and another that has them, but allow users to easily download competing software from other sources so consumers can have broader choices.

The FTC gave the software giant an Aug. 24 deadline to comply with the order.

In response, Microsoft asked the FTC to reconsider all its charges in late March, while at the same time taking the matter to court.

The South Korean ruling dealt a blow to Microsoft amid an intensifying antitrust fight in Europe after it was ordered by the European Commission to remove its media player from Windows and pay fines of 497 million euros in March 2004.

The FTC, however, said it will accept the request by Microsoft regarding a court injunction it sought to preempt the bundling of MSN Messenger and the media player with other successful products, including MS Office.

"The injunction has been found to be unnecessary because the FTC can issue corrective measures if the software company sells its MS Office program with Microsoft Media Player," said an FTC official.

The South Korean regulator began investigating Microsoft's alleged unfair market practices in 2001 when local Internet portal Daum Communications Corp. lodged a complaint.

The investigation was widened after U.S. software maker RealNetworks Inc. filed a similar complaint here. Before the FTC's ruling, Daum and RealNetworks dropped their complaints after settling with Microsoft for $30 million and $761 million, respectively.

Seoul, May 23 (Yonhap News)