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By Cho Jin-seo
Staff Reporter

Microsoft has dropped its appeal against the Korean Fair Trade Commission, complying with the antitrust regulator's 2006 instruction to pay a 32.4 billion won ($34 million) fine and to sell its Windows operating system and other software products separately.

The surrender in the Seoul court is the latest in a series of legal defeats Microsoft has suffered around the world over allegations of antitrust behavior. Just last month, the firm lost a decisive $690 million appeal case in the European Union.

``The plaintiff completely withdrew the appeal,'' said an official from Seoul High Court judge Cho Byung-hyun's office over the phone Tuesday. ``The trial scheduled for Wednesday is canceled, and Case 8077 will be struck unless the defendant decides to disagree with the plaintiff in two weeks.''

Microsoft Korea's spokesperson Kim Jin-hwan refused to comment, only saying that he wishes for reporters to ``better understand'' the case.

As the Windows operating system dominates the market with more than 90 percent of desktop and laptop PCs in Korea built on it, Microsoft has frequently been accused by other software makers for bundling its accessory products to Windows.

Daum Communications, a major Web portal operator, first filed a suit in 2001 against Microsoft, alleging that it tied its Internet messaging program (MSN messenger) to the Windows operating system, thus making it hard for Daum's messaging program to compete on the market.

The suit was followed with one by RealNetworks, a U.S. media player maker, in 2004, which claimed that Microsoft forced Windows users to use its Media Player program.

Daum and RealNetworks pulled out of their cases in 2005, as Microsoft promised to compensate them with $761 million and $30 million respectively. But the Fair Trade Commission continued its investigation, and in February 2006 ruled that Microsoft had abused its dominant position and ordered the fine. Microsoft appealed to the Seoul High Court and its ruling was scheduled for this Wednesday.

Regardless of Tuesday's announcement of withdrawing of the appeal, the FTC is considering continuing the case.

``Some in our organization are saying that we must not end the case like this, because it can set a good precedent for similar antitrust cases,'' said an FTC official in charge of the suit. He requested anonymity, as the commission is still undecided about its stance. The commission is reported to be investigating two foreign-based technology firms Intel and Qualcomm for antitrust cases in Korea.

In Europe, Microsoft suffered a bitter defeat last month as a court upheld a record $690 million fine imposed by the European Commission in 2004.

On Sept. 17, the European Union Court of First Instance denied Microsoft's appeal versus an EU antitrust order to share communications codes with rivals and sell a version of Windows without Media Player.

Just like South Korea's Fair Trade Commission did, the EU antitrust watchdog has ordered Microsoft to sell a version of Windows without a media player already bundled in and to share technical information with rivals needed to make products that could function with Windows.

The outcome of the EU court verdict, however, sparked controversy regarding its effect on the software industry. While rival firms and many others hailed the decision as a landmark victory, some others including the U.S. government expressed concerns that it may eventually do more harm than good for consumers by discouraging firms from making investments in new technologies and services.

``Rather than helping consumers, (the decision) may have the unfortunate consequence of harming them by chilling innovation and discouraging competition,'' Thomas Barnett, head of the Justice Department's Antitrust Division, was quoted as saying by AFP.

indizio@koreatimes.co.kr