TIPS^®  Taiwan Intellectual Property Special

“Investigation Group of Monopoly on Software Market” of Microsoft

Our TIPS reported in April 2001 that the Fair Trade Committee in Taiwan organized an “Investigation Group of Monopoly on Software Market,” on responding to the concerns about misuse of monopoly position by software company.

The FTC has held a public hearing to clarify questions regarding intellectual property rights, monopolistic market of software, and abuse of market power. The FTC further consulted the approaches of the United States, Japan and the European Union, dispatches personnel to collect expert opinion in the Information Service Industry Association (ISIA) and the Institute for Information Industry (III), and tries to understand the licensing disputes between the Internet cafés and Microsoft. On May 20, 2002, the FTC interviewed Microsoft Taiwan for its pricing policy, relationship with distributors, and pricing by the distributors inthe markets. The FTC made it clear that the FTC will continue to investigate in a detached position. The investigation will focus on (1) whether Microsoft Taiwan unduly fixed the prices by its monopolistic market power; (2) whether there was a tying, requiring customers buy products that they do not need; and (3) whether Microsoft denies to provide post purchase services if the customer decides not to upgrade the system.

The FTC also pointed out that up to now only the United States and European Union has commenced antitrust investigation on Microsoft, and the antitrust lawsuit between the US Department of Justice and Microsoft has been 4 years without any solid outcome. The investigation in Taiwan will become global focus. Under the circumstances, it should be carried out carefully, and may not be complete soon.