Microsoft May Pull Windows from Korea

In its quarterly filing with the Securities and Exchange Commission, Microsoft made an interesting disclosure about an ongoing investigation by the Korean antitrust agency: it may delay future versions of Windows in South Korea or pull the operating system from the country altogether.

The Korean Fair Trade Commission (KFTC) is looking into allegations that Microsoft violated antitrust laws by bundling services such as streaming media and instant messaging. The complaints first came from Korea's Internet portal Daum Communications and later by RealNetworks.

"It might be necessary to withdraw Windows from the Korean market or delay offering new versions in Korea," Microsoft wrote in the filing. The company previously said the KFTC's claims were without merit, but it would cooperate fully.

Earlier this month, Microsoft settled its long-standing antitrust battle with RealNetworks in a blockbuster $761 million deal, which included marketing promotion for Real and access to internal Windows APIs.

Although Real dropped its complaints in the US and European Union following the settlement, the KFTC says it will continue its investigation unabated. Microsoft acknowledged that South Korea could ask the company to remove portions of the operating system or create a version specific for the country.

Microsoft has already been forced by the European Union to create a special version of Windows for EU computer makers that strips out Windows Media Player. However, demand for the special release has been minimal, according to reports.

Jupiter Research senior analyst Joe Wilcox suggested Microsoft could be trying to send regulators a message.

"According to SEC filings, about two thirds of Microsoft revenue comes from the US. Much of the rest from Europe," Wilcox explained. "While Korea is an important market, given huge broadband penetration there and the influence of companies like Samsung, it's not necessarily all that materially important to Microsoft."