July 26, 2004 10:30 AM PDT

Microsoft appeals Japanese antitrust decision

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Microsoft on Monday said it will appeal a ruling by the Japanese Fair Trade Commission that the software maker's contracts with computer makers violate that country's antitrust law.

Microsoft said it will seek a legal review of the decision, which relates to a provision of the contracts that requires the computer maker to agree not to sue Microsoft alleging that Windows infringes on that company's intellectual property. The company said it has already removed that provision from new contracts, but the Japanese ruling would affect existing pacts.

"After careful examination of the contents of the recommendation, Microsoft has decided that it is unable to accept the demands of the recommendation, and has today informed the JFTC of this decision," Microsoft said in a statement.

The Japanese FTC issued its original opinion on July 13, ruling that Microsoft imposed undue restrictions on computer makers' business activities in making them sign the Windows licensing pact, a violation of Japan's Antimonopoly Act. Microsoft said at the time that it disagreed with the decision and said it would seek a review of the ruling.

The decision to reject the ruling follows Microsoft's decision to appeal a European Commission ruling that found violations of European law and ordered Microsoft to unbundle its media player and offer more technical information to server rivals as well as pay a record $600 million fine. The company and regulators will meet this week with Bo Vesterdorf, the European judge who will preside over Microsoft's appeal.

By not accepting the Japanese decision, the software maker triggers an appeals process.

"Microsoft looks forward to further explaining its views and fostering understanding of its position at JFTC hearings," the company said.

Although no date has been set for the hearing, or shinpan, it normally occurs about one month after a rejection of a commission order.

The cases are usually heard by a panel of three judges who are overseeing the case, said Munenori Onda, section chief for Japan FTC's general affairs division. The length of the hearing is dependent upon the complexity of a case, he said.

 

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