Microsoft Corp’s Japanese operating unit has been raided by officials from Japan’s Fair Trade Commission investigating anti-monopoly law violations. According to reports, an anonymous Japanese Commission official said Microsoft Japan is being accused of attaching improper restrictive conditions when signing software deals.
The Commission says Microsoft’s practices specifically require Japanese computer and makers, such as Sony, Fujitsu, and NEC, that want to license its Windows XP operating system software to reveal proprietary information that would infringe and sign away their right to sue Microsoft if it used that information for its own profit.
Microsoft officials confirmed the raid, which happened on Thursday at its Tokyo offices, but denied any wrong doing.
In a statement, Microsoft acknowledged that its original contracts with computer manufacturers included a provision that forces them to cede their right to file patent infringement lawsuits against the software maker. Microsoft also claims that it had last week notified computer makers, including those in Japan, about its decision to drop the patent-related provision when new contracts are drafted later this year.
The Redmond, Washington-based software giant faces similar accusations in Europe that it is abusing its monopoly on its dominant Windows PC operating system sales to push prices higher or remove competition in the market. European regulators are nearing the end of a five-year investigation with a ruling expected next month.
The latest Japanese probe comes in the face of a growing threat in Asia from the free Linux open-source operating system. Asian countries have become increasingly wary of their dependence on Microsoft Windows to power their computers and networks, recently citing susceptibility of the software to viruses and hacking attacks.
Regional Linux adherents Japan and South Korea have also been urging China to join an effort to research a Linux system that better handles Asian languages nuances.
Microsoft may not be unduly worried by the latest probe since the Japanese Fair Trade Commission regularly raids companies it suspects of engaging in illegal business practices. But its investigations rarely lead to criminal charges or serious fines.
Japanese authorities have accused Microsoft of violating anti-monopoly regulations in the past. In 1998 the Commission ordered Microsoft to cease bundling pre-installed software (Internet Explorer and Word and Excel applications) into PCs in a way that put competitors at a disadvantage.
The four-year EC investigation into Microsoft decided last year that the company had abused its market position and hurt competition in low-end servers, by restricting information over interoperability with Windows, and multimedia software by bundling Media Player with the desktop operating system.
Microsoft’s chief financial officer John Connors this week is reported to have called the EC’s investigation the most important case facing Microsoft.
Should Microsoft fail to reach an amicable settlement, the company is reportedly facing a number of penalties including being compelled to sell two versions of its desktop operating system in the EC, one with and one without Media Player.
This article is based on material originally published by ComputerWire