REDMOND, Wash., Nov. 19, 1998 — Microsoft Corp. today welcomed the decision by the Japan Fair Trade Commission (JFTC) to close its investigation of the company and to reject allegations relating to Web browsing technology that are being pursued by the Department of Justice (DOJ) in the United States.
After a twelve-month investigation involving a review of more than 250,000 pages of documents, the Japanese antitrust agency has decided not to pursue allegations relating to Microsoft’s competition with Netscape Computer Corp. or Microsoft’s contracts with Internet service providers (ISPs), both of which are central to the current DOJ antitrust trial in Washington, D.C. The agency issued a warning with respect to older Microsoft contracts with ISPs that have now been superceded, but expressed no concerns whatsoever with respect to the company’s current ISP contracts.
“This ruling represents a significant legal victory for Microsoft in Japan,”
said Masaru Kitamura, a lawyer and former Japanese Foreign Ministry official who represented the JFTC in its dispute with the United States before the World Trade Organization concerning practices in the film market.
“A warning simply means that the JFTC started an investigation with suspicion about an allegation, but found no substantial evidence of improper conduct. After an extensive investigation, the JFTC has concluded there is no credible evidence that Microsoft is engaging in any anti-competitive practices with respect to browsers.”
“We are gratified that, after careful review under competition laws that are much stricter than those in the United States, the Japanese government has closed the investigation of allegations that are being pursued by the DOJ in Washington, D.C.,”
said Brad Smith, general counsel, international at Microsoft.
”
This case has shown that Microsoft’s products and practices benefit consumers, and the proper role of antitrust law is to focus on consumers, not the narrow interests of a few competitors.
“It’s certainly ironic that the Japanese government has dropped all of the browser allegations, but our own government is continuing its attack on one of America’s leading exporters,”
Smith said.
“This decision is further evidence that the DOJ’s attacks against Microsoft are fundamentally misguided.”
The JFTC reviewed and will not pursue allegations that have been advanced by Netscape in the DOJ’s antitrust trial that Microsoft took improper action to discourage computer manufacturers from installing Netscape Navigator. The JFTC informed Microsoft that it had determined that Microsoft’s practices
“cannot be immediately found to have tended to impede fair competition in Japan’s distribution market for Web browsers.”
The agency pointed, in particular, to the fact that browsing software is easily distributed to consumers in many different ways, a key point that Microsoft has advanced in federal court in Washington.
“Although Netscape has been lobbying governments around the world for over three years to adopt this claim, the result in this case shows, once again, that the allegation is without merit,”
Smith said.
The JFTC also rejected the DOJ’s allegation that the company’s current contracts with Internet service providers are unlawful. The JFTC raised no concerns with respect to Microsoft’s current contracts with ISPs, which are identical to the contracts that are the subject of the DOJ’s trial in Washington. Even with respect to Microsoft’s older ISP contracts, the JFTC concluded that there was no basis to take any legal action against the company.
The JFTC recommended that Microsoft continue to make Microsoft® Excel available on a standalone basis for preinstallation by PC manufacturers in Japan. Microsoft announced that it will do so, thereby resolving all issues raised by the JFTC in the case first opened last year and bringing the case to a close. In recent years the company has marketed in Japan an increasingly popular bundle of Microsoft Word and Excel, in competition with a similar bundle of word-processing, spreadsheet and other software distributed by a leading Japanese software publisher, JUSTSYSTEM Corp.
“Earlier this year, after the JFTC first raised these issues, we changed our internal ordering procedures to make it even easier for Japanese computer manufacturers to obtain Excel on a standalone basis from us if they want,”
Smith said.
“To date, only one Japanese PC company has contacted us and, after it assessed market interest, concluded that there was no consumer demand for the product and therefore decided not to offer it. Nonetheless, we will continue to make it easy for PC manufacturers to order this product if they want, and we’re gratified that, with this step, we’re able to bring this case to a close.”
Although the JFTC objected to Microsoft’s product, it is taking no action with respect to the company’s leading Japanese competitor, even though its product configuration is virtually identical.
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