[EDITORIALS]The Microsoft effect

The Fair Trade Commission imposed a penalty of 33 billion won ($32 million) on Microsoft Corp.’s Korean branch for selling Windows Media Player and MSN Messenger as a package with its Windows operating system. The antitrust watchdog has also ordered Microsoft to sell, for the next 10 years, the Media Player and Messenger programs separately from Windows or otherwise allow its rival companies’ products as tied-in items together with Microsoft’s products.
The decision came after prolonged consideration that took 51 months. Microsoft said it will not obey the commission’s order but take the case to the court.
The commission decided that a bundled sale constitutes a violation of antitrust law. It is the commission’s opinion that such sales undermine the interest of consumers by restraining competition and creating barriers against rival products’ advancement into the market.
Real Networks and Daum Communi-cations, the rival companies that filed complaints, came to agreements with Microsoft and cancelled their complaints, but the cancellation didn’t have much influence on the commission’s decision. We can determine the commission’s will from the fact that it has given an order to sell rival companies’ products as tie-in items along with Microsoft’s, which even the U.S. and EU governments have not done.
We hope that the decision will serve as an occasion that promotes competition in the market. Given the existing industrial structure, the commission made a fair decision. Through bundled sales that make use of a monopolistic status in the market, Microsoft has enjoyed the position of a dominant power in the messaging and media player markets. And the room for consumers to use other companies’ products was reduced.
However, we are worried about whether the commission has overlooked technological trends while focusing too much on market competition. Digital convergence has already become an unavoidable trend, and Korean companies have competitiveness in this field. If programs are free, providing a variety of them will boost consumer choice. This is the reason why some people point out that the decision could become a new regulation that obstructs the evolution of digital products.
Now, the government’s administrative action is concluded. The final decision will come from the court, but we have to minimize the aftermath. The U.S. government has paid special attention to the commission’s action by sending an official from the Justice Department. Microsoft said, “We can end the sale of Windows in Korea,” and there could be trade retaliation from the United States. We have to be prepared to cope with the aftermath.