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(Nikkei BP Group)

(No.1 High-Tech News Site in Japanese)

  • FTC Warning to Microsoft Unique in Japan: Chief Investigator
  • December 17, 1998 (TOKYO) -- Microsoft Co., Ltd. of Japan accepted on Dec. 10 a recommendation given on Nov. 20 by the Fair Trade Commission (FTC) on Microsoft's improper sales of personal computer software accompanying the Windows operating system.
    The company's acceptance means that illegal acts pertaining to tie-in sales of Microsoft Word, Excel and Outlook in personal computers were admitted by Microsoft's Japanese subsidiary.

    Nikkei Personal Computing, a magazine published by Nikkei Business Publications, Inc., interviewed Tokuhiko Obata, director of the FTC's Second Special Investigating Division (Investigation Bureau), on the recommendation. Obata had served as director of the case.

    Nikkei Personal Computing: Please explain the recommendation (which the Fair Trade Commission gave Microsoft Co., Ltd. of Japan)?

    Obata: Following our investigation of Microsoft, we recommended that the software company discontinue the pre-installation of Excel and Word on PCs, and warned the company about its practice of combining its Internet Explorer Web browser with the Windows operating system.

    Nikkei PC: The recommendation did not specify the versions of Excel and Word software.

    Obata: That is because we considered circumstances peculiar to the PC industry.

    The speed of software upgrades is fast, and if we specify certain versions in our recommendation, the recommendation may quickly become ineffective. Also, Microsoft has violated the antimonopoly law in more than one version of its software products.

    Therefore, we did not specify versions in our recommendation. This will prevent Microsoft from engaging in other illegal combined sales in the future.

    Nikkei PC: On the matter of the Internet Explorer, why did you issue Microsoft a warning instead of a recommendation?

    Obata: That is due mainly to circumstances unique to Japan.

    Our probe of the distribution of Web browsers in Japan found that distribution via CD-ROMs in magazines accounted for 85 percent of the total. Magazines usually provide more than one Web browser.

    Therefore, even if Microsoft pressures Internet service providers (ISPs) not to distribute rival Web browsers of other companies, the attempt won't constitute a substantial prevention of competition.

    However, it is true that Microsoft's agreement with ISPs had a provision to limit distribution of competing browsers. The FTC decided to give the company a warning to prevent such action from occurring again.

    Nikkei PC: What are the concrete steps to be taken once Microsoft has fully accepted the recommendation?

    Obata: Microsoft accepted the recommendation on Dec. 10. We will make a decision in the form of an official order, possibly by the end of December. The FTC will notify PC makers of the decision, and announce to general consumers details of the decision in newspapers and other media.

    Related story: Microsoft Japan Ordered to Halt Unfair Trade Practices

    (Nikkei Personal Computing)

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    Updated: Wed Dec 16 16:14:02 1998 PDT