Microsoft Gets Hit In South Korea

A Seoul Central District Court ruling went against Microsoft (MSFT - Analyst Report) on Friday. The court held that Microsoft’s bundling of the Windows Media Service with its Windows operating system amounted to unfair competition. It was felt that consumers should be allowed to make their own choice, which would, in turn, promote healthy competition among the providers.
 
Although the ruling went against Microsoft, the court set aside damage claims by local software company Dideonet, which initiated the proceedings. The $81 million (100 billion won) demanded by the company could not be related to actual losses made.
 
This seems to be following a pattern, since Microsoft was previously barred from bundling its instant messenger program, although there again, compensation was denied. It is apparent that the bundling strategy is being frowned upon, although none of the small local players have been able to cash in on it so far.
 
However, this is not the first time that the software giant has been reprimanded for its bundling strategy in South Korea. In 2006, it not only received an adverse ruling, but was also forced to part with $26 million (33 billion won).
 
Earlier this year, Microsoft decided to bow out of the browser bundling war in Europe. While the matter was still under consideration by the European Commission, management was in a hurry to settle the situation. The company’s Windows 7 platform is due for launch next year and the haste was targeted at taking care of legal obstacles well beforehand.
 
Microsoft argued that a browser was an essential part of the operating system. However, this led to the possibility of its having to offer rival companies’ browsers as well as its own, at which point the company took matters into its own hands. It will now ship the new operating system in Europe sans IE, leaving the floor open to Mozilla’s Firefox, Apple’s (AAPL - Analyst Report) Safari, Google’s (GOOG - Analyst Report) Chrome or Opera (more commonly used as a mobile phone web browser).

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