26 February 2004 Microsoft’s antitrust troubles deepened yesterday when its Tokyo offices were raided by the Japan’s Fair Trade Commission.
The FTC is investigating claims that the software giant has imposed unfair licensing conditions on computer makers in Japan, where it enjoys as strong a monopoly on the PC operating system market as it does in the US and Europe.
According to a spokesman for the FTC, Microsoft demands that PC makers wanting to pre-install Windows on their products must sign away all rights to sue Microsoft, regardless of whether they later find, for example, that it has wrongly used patented technology.
“The company is suspected of setting unfair conditions when giving licences for Windows to Japanese computer makers,” said the FTC official. “Unless Japanese companies agree to the clause, they cannot pre-install Windows in their computers,” he added.
Microsoft Japan admitted that it had been raided and said that it was holding talks with FTC officials in a bid to resolve the matter.
The FTC is also seeking help from Japan’s PC hardware makers, including Fujitsu, market leader NEC and Matsushita, which is better known in Europe under the Panasonic brand name.
It is not the first time that the software giant has attracted the attention of the FTC in Japan. In 1998, it was warned about the way it bundled its Office applications suite with Windows.
The Japanese raid comes at a time when the European Commission’s five year antitrust investigation into Microsoft is drawing to a conclusion, with a decision expected before the end of March.
The European case centres on Microsoft’s bundling of its Media Player software with the Windows operating system. At the moment, Microsoft is proposing selling two version of its Windows operating system in Europe: one with Media Player pre-installed and one without, according to reports.
Settling the EU case is a priority for Microsoft, said chief financial officer John Connors. “We are very focused on getting things settled,” said Connors. “Right now, [it] is the most important case for the company, shareholders and customers.”