South Korean Internet Portal Daum Sues Microsoft Over Antitrust Concerns

Strategic Insights -

Daum Communications Corp., South Korea's largest Internet portal, has filed a lawsuit against Microsoft Corp. alleging that the U.S. software giant is violating the country's antitrust law by bundling its instant messaging software MSN Messenger into its Windows XP operating system. Daum claims that this practice impedes competition and deprives consumers of the freedom to choose different products. The lawsuit comes after a similar case was settled in Europe, where the European Commission imposed a $720 billion won fine on Microsoft for its anticompetitive practices.

Key Takeaways:

  • Daum Communications Corp. has filed a 10 billion won (US$8.8 million) lawsuit against Microsoft Corp. for allegedly violating South Korea's antitrust law.
  • The lawsuit claims that Microsoft's bundling of MSN Messenger into Windows XP constitutes an unfair business practice that impedes competition and deprives consumers of free choice.
  • Daum competes with Microsoft in South Korea's instant messaging market and argues that Microsoft's dominant position in the software market has allowed it to block customers' chances to select their products freely.
  • Similar anticompetitive concerns are being investigated in Japan, where Microsoft is facing investigation by the country's monopoly watchdog.
  • The lawsuit is the latest development in Daum's attempts to block the sales of Windows XP in South Korea, following a complaint filed with the country's Fair Trade Commission in September 2001.
  • Microsoft's Korean unit has declined to comment on the lawsuit.

Statistics:

  • 10 billion won (US$8.8 million) - the amount of the lawsuit filed by Daum against Microsoft.
  • 70% - the percentage of South Korea's 48 million population that has access to the Internet.
  • 11.5 million - the number of broadband connections in South Korea, giving the country the highest broadband penetration rate in the world.
  • 46,350 won - the share price of Daum as of 11:30 a.m. local time.
  • 500 million euros (720 billion won) - the fine imposed by the European Commission on Microsoft for illegally using Windows to control markets in operating systems.

Sources:

  • Asia Pulse, April 12, 2004
  • Yonhap, December 4, 2003 (timestamp: 12:22)