Microsoft fine has Koreans puzzled

When the European Union fined Microsoft Corp. for antitrust activities last year, it did so to the tune of over 600 billion won ($580 million). But when the company was penalized by Korean authorities this week, fines totaled just 33 billion won, a discrepancy that has raised eyebrows here. When the Korean antitrust watchdog on Wednesday found Microsoft guilty of bundling its Messenger and Media Player software with the Windows operating system, many observers expected a hefty fine to be levied. But as the government acknowledged, the relatively low fine caught the public by surprise. “The fine was not as large as many had expected,” a government official said. “But the Korean standard for levying fines is different from Europe’s.” Under Korea’s current fair trade law, if a business operator with a high market share is found to have abused its dominant position, a fine of 3 percent of the company’s sales revenue in Korea is imposed, he explained. Although Microsoft generated about $39.8 billion in global sales last year, its Korean annual revenue stood at just 200 billion won or so. Microsoft was found guilty of violating antitrust regulations from 2001 until 2005. The company’s revenue over that period was estimated at 1 trillion won, 3 percent of which is 33 billion won. By contrast, the EU can slap errant companies with fines of up to 10 percent of their revenue. Given that even the EU’s fine amounted to less than 2 percent of the company’s worldwide sales, the Korean fine is no more than “pocket money” to Microsoft, experts say. by Kim Won-bae