Digital Trends

Microsoft may withdraw its Windows operating systems from South Korea if the country's antitrust agency requires the company to unbundle messaging and media player software.

In a regulatory filing with the Securities and Exchange Commission yesterday, Microsoft indicated it may consider withdrawing Windows from the South Korean market—or delay offering new versions there—if the Korean Fair Trade Commission (KFTC) issues a remedial order that Microsoft unbundle instant messaging and media player software from the operating system.

The KFTC has been investigating Microsoft's business practices since 2001, when the South Korean portal provider Daum Communications Corp. (Korean language site) charged that Microsoft's bundling of additional services with the Windows operating system violated Korean antitrust regulations. The KFTC expanded its investigation in 2004 following a similar allegation from RealNetworks, and began holding hearings on the matter in July, 2005.

Microsoft's Form 10-Q filing with the SEC states, "If the KFTC enters an order requiring Microsoft to remove code or redesign Windows uniquely for the Korean market, it might be necessary to withdraw Windows from the Korean market or delay offering new versions in Korea unless the remedial order is stayed or overturned on appeal."

Earlier this month, Microsoft and RealNetworks reached a landmark settlement intended to resolve all RealNetworks antitrust complaints against the software on a worldwide basis.

The KFTC has said its deliberations will not be impacted by the RealNetworks settlement, and a decision could come as soon as a plenary session on November 2. Microsoft says it has been fully cooperating with the KFTC probe and the antitrust complaints have no merit.