Microsoft Statement on Korea Fair Trade Commission Report

REDMOND, Wash. — Feb. 24, 2006 — Microsoft Corp. today issued the following statement in response to the Korea Fair Trade Commission’s issuance of a written report following the Commission’s decision announced last December:

The Korea Fair Trade Commission report released today is one step in a long legal process, and we believe the facts will show that Microsoft’s actions have respected Korean law. It is important to note that this is not a new decision; this is simply the written report of the decision announced by the KFTC last December.

We continue to believe that the integration of media player and instant messaging capabilities in the Windows® operating system is legal and has benefited millions of Korean consumers.

The facts do not support the Commission’s position. New instant messaging services and media players are flourishing in Korea. Consumers can easily obtain and use a wide range of technology from many different companies, and Microsoft has designed Windows so consumers have the freedom to use any instant messaging services or media players they choose.

If allowed to stand, this decision will have a negative effect on Korean consumers and Korean innovation. The restrictions proposed by the KFTC are different and even more than those required by the European Commission. Under the KFTC restrictions, Microsoft would need to develop and distribute two new versions of Windows for Korea, including a version that has significant features removed. It remains difficult to understand how Korean consumers would benefit from such a product.

We will appeal this decision within 30 days and may request a stay. We feel these steps are in the best interest of Korean consumers and are necessary to protect innovation.

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