Japanese Anti-Monopoly Authorities Raid Japan Unit Of Microsoft

A Microsoft spokeswoman confirms the inspection by Japan's Fair Trade Commission but denies any wrongdoing.

InformationWeek Staff, Contributor

February 26, 2004

2 Min Read

TOKYO (AP) -- Officials from Japan's fair trade watchdog raided the Japanese unit of Microsoft Corp. on Thursday on suspicion of anti-monopoly law violations, the authorities said.

A spokeswoman at Microsoft Japan confirmed that the Fair Trade Commission inspected the Tokyo headquarters office but denied any wrongdoing.

A commission official, speaking on customary condition of anonymity, said Microsoft Japan is suspected of attaching improper restrictive conditions--such as requiring that Japanese computer and makers reveal proprietary information that would infringe on patents--when signing software deals.

The official refused to elaborate. Japanese fair trade officials generally do not comment on continuing investigations. The commission frequently raids companies it suspects of illegal business practices, but the investigations rarely lead to criminal charges or fines.

In the United States, Redmond, Wash.-based Microsoft said it was cooperating with Japanese authorities.

In a statement, Microsoft said its contracts with manufacturers had included a provision that would force computer makers to give up their right to file patent-infringement lawsuits against the software maker. The company said it had notified computer makers--including companies in Japan--last week about plans to drop the patent-related provision when new contracts are signed later this year.

The case offers a glimpse into the business practices that Microsoft has used to keep its operating system the dominant software for computers sold around the world. Under agreements with such patent-related provisions, Japanese manufacturers like Sony, Fujitsu, and NEC would have to agree to provide secret product information while signing away their right to sue if the software maker used that information for its own profit.

In Europe, regulators are nearing the end of a five-year investigation into the way the company sells its Windows software there. A ruling is expected as early as March.

The latest probe in Japan comes as Microsoft faces a growing threat in Asia from the free Linux open-source operating system. Japan and South Korea have been prodding China to join an effort that boosts research in a Linux system that better handles Asian languages.

Like European countries, Japan, South Korea, and China long have been wary of leaving too many government computers and networks dependent on Windows. Many experts view Windows as too prone to computer viruses and hacking.

Japanese authorities have accused Microsoft of violating anti-monopoly laws before.

In 1998, the Fair Trade Commission ordered Microsoft to stop bundling software pre-installed in personal computers in a way that put competitors at a disadvantage. But the company wasn't fined or charged with a crime.

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