In December 2005 the Korea Fair Trade Commission (KFTC) found that Microsoft had violated South Korea’s Monopoly Regulation and Fair Trade Act in two ways.

First, by tying Windows Media Service to the Windows server operating system, where Microsoft has market dominance, and secondly, by tying Windows Media Player and its instant messaging programme to the Windows PC operating system, where Microsoft has monopoly power.

The KFTC fined Microsoft approximately W32 billion ($35 million) and ordered the company to unbundled the tied product, including Windows Media Player.

Microsoft appealed the decision in the Seoul High Court, describing the restrictions imposed by the KFTC as “more extreme than those required by the European Commission”.

Microsoft’s decision, made on October 16, comes after the Court of First Instance of the European Court of Justice rejected the software company’s appeal against a European Commission-imposed fine. The Commission had ruled that Microsoft had breached European competition rules by refusing to provide “interoperability information” to competitors and by tying its Windows Media Player software to the purchase of Windows operating systems.

A Microsoft spokesperson said in an emailed statement yesterday:

“Rather than pursuing an appeal of the KFTC’s decision, our focus going forward is to continue to work collaboratively with the KFTC, and to ensure that consumers benefit from vibrant competition in the IT industry. We will obviously continue to comply with the KFTC decision, just as we have been doing since August 2006.”

A spokesperson for the KFTC confirmed to MIP Week that the case will now be dropped.

Following the CFI decision Microsoft’s allies raised fears that companies may have to change the way they license their IP rights. But Ik-Hyun Seo, partner of Cho & Partners in Korea, told MIP Week that the Korean decision did not involve any compulsory licensing of technology and source code.