South Korea orders Microsoft to unbundle Windows

South Korea orders Microsoft to unbundle Windows

Summary: Guilty again: Microsoft has now been told to offer versions of Windows in South Korea that are free from Windows Media Player and its IM client

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The Korea Fair Trade Commission (FTC) has imposed a 33 billion won (£18m) fine on Microsoft and ordered the company to unbundle Windows Media Player from its Windows operating system. The move comes after a lengthy process that found that Microsoft abused its dominant market position in violation of the country's Monopoly Regulation and Fair Trade Act.

The ruling comes less than a week after Microsoft assured a court in the US that its monopolistic days were over. It follows a similar case last year in which Microsoft was found guilty by the European Commission and ordered to offer an unbundled version of Windows here; it was later accused of dirty tricks which included deleting registry items to stop rival media players working with some applications.

In South Korea, Microsoft has been found guilty of violating the Act by tying its Windows Media Player to the Windows server operating system, and its instant messaging program to the desktop version of Windows. Such practices raised the barrier to entry for competing companies, leading to restriction of market competition and obstruction of consumer welfare, said the FTC.

By tying its streaming media products to its operating systems, Microsoft managed to upend the domestic media server market "that had been almost fully preoccupied by RealNetworks and domestic venture companies," and grab more than 90 percent of the market. The shift in market share due to Microsoft tying Windows Media Player to the operating system has been dramatic: from a 39 percent share in December 2000, when Microsoft first tied the player to Windows, Microsoft's share has risen to 60 percent. RealNetworks has seen its market share fall from 39 percent to 5 percent over the same period.

Similarly, Microsoft used its dominant position in desktop operating systems to restrict competition in the IM market.

These practices led to an increased supply of media in the Microsoft format, and of applications that compliment Windows media technology, which in turn led to a raised barrier of entry for the server and desktop operating system market, said the Korean FTC.

Microsoft is now required to unbundle the Windows Media Service from its server OS and deliver two new versions of its desktop OS within 180 days. One desktop OS must be stripped of both Windows Media Player and IM clients, and another may contain those but must also contain links to web pages where competing media players and IM clients can be downloaded.

The FTC said it hopes the remedies will allow digital media software and IM businesses to compete on a level playing field with Microsoft, and restore competition in markets for server and desktop operating systems as well as for streaming media server and player, and IM markets.

Microsoft said it would appeal the ruling. "We were very disappointed with the ruling and will appeal it," Thomas W Burt, deputy general counsel of Microsoft, told Reuters.

Topic: Operating Systems

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  • im not microsofts biggest fan, but it seems unfairs that they have been ordered to place links to competing software in the os, which has been claimed would make it fair, i have never seen a link to media player on any of the realnetworks products, and where would the
    anonymous
  • The article blames Microsoft for stealing most of the "Real Networks" customer base. That may be true for some, but not for all. I used the Real Player for a year or more after it was introduced. I liked it and was very happy with its performance. Then I upgraded it to a newer version and caught it trying to "phone home". It seemed insistent on spying on me. U removed it from my machine. I now remove it from all my clients' computers before I do any other work on those machines. In the years I moderated the "tech" side of an online bulletin board I made my dis-satisfaction with all "Real" products well known. There were no disputes in all those years... nobody else wanted to be spied on either.

    Microsoft could be spying on me and I don't know it. However, I do use a "third-party" firewall which traps all incoming AND OUTGOING communications. Other than the few apps/services which actually need to get out of my machine to do tasks which I WANT done I do not believe Microsoft is spying on me. When I turn off the options that cause interaction with their servers those communications actually stop. Using options inside "Real" products I was never able to get it to cease its attempts to communicate with other servers... it seemed to me that if it couldn't spy on me it wasn't going to work at all.

    I feel the "Real" product line is real crap - but I believe that position was EARNED by the "Real" company itself. I still feel abused that, in my opinion, the "Real" company developed such a large following with a trustworthy product - then loaded it up with spyware through upgrades. I could easily believe that such was their strategy from the very beginning. It was and remains an unforgivable violation of my trust. I will never allow "Real" products on my machines, and I will not take on clients who will not permit me to remove "Real" products from their machines.
    anonymous
  • I can't blame any country for feeling suspicious about American products occupying their workplace, but I feel that Microsoft's decision to bundle their products isn't criminal. As a manufacturer, it makes sense that the only way to be certain that your computer is secure from external threats is to create -and provide- a system of products that operate predictably within a known operating system. With software codes being proprietary, how could Microsoft be certain that other products aren't damaging it's system? If Microsoft did allow other companies to bundle programs along with it's operating system, it would have to be responsible for repairing or replacing computers that became infected or damaged. If it didn't bundle software, Microsoft wouldn't stay competitive.

    So Microsoft bundles software along with it's operating system. Big deal. If I were buying a home I'd expect it to come with a bedrom made by the same builder. I'm not going to cry foul and sue the manufacturer because they're not offering other manufacturers a chance to build my bedroom.

    If clients aren't satisfied with the software included within an operaing system, then I suggest they learn about that simple "add/remove programs" feature that has been around on Windows systems for years. install whatever program they want, and leave the courtroom to more pressing matters.
    anonymous
  • The Korean decision may however simply fade away unenforced like the similar EU and US DOJ decisions.
    The EU case seems to have run out into the sand this summer when MS told the court to first put the case on hold and then replaced the judge.
    anonymous
  • Bill, WMP does "phone home" and it may be that your third-party firewall has been programmed to let that process get through. How much do you really know about the "Generic Host process" anyway? (Just as an example...)

    David, certain products, e.g. IE are so tightly integrated into Windows that to remove them actually removes some of the capabilities of your system (for example, remove IE and Windows Explorer will not work as you expect.)
    anonymous
  • We need to be clear on what bundling means. Simply supplying applications on top of the operating system is fine. After all, Linux distros and Apple do it.

    However, Microsoft do not simply bundle IE/Messenger/WMP with Windows. They 'integrate' it so tightly in to the operating system that any OEM that dares to remove a Microsoft app risks breaking the operating system and 1000s of support calls. And how many typical end users know how to uninstall these products? Why are they not in the Add/Remove programs list? It's absolutely scandalous, and this decision is absolutely correct.
    anonymous
  • Mr. Mendez seems to think you can remove any M$ programs you don't want Try it and see how far you get. M$ designed their product so everything is tied together to prevent competition. They are not in the business to share market, they are in busines to be the only option. South Korea is out of luck if the think they can win this one. It will simply drag on for years and
    disappear like all the others and M$ will continue with business as usual.
    anonymous
  • David,
    A house with a bedroom is a poor analogy.
    It's more like - if you dare use cable TV, your house will fall down.

    Messenger is not bundled, it's built into admin and networking services.
    It's not impossible to disable it - but tricky (thanks to Steve Gibson)
    It re-installs with Outlook Express
    It's not listed in Add/Remove programs
    - who knows why.?
    anonymous