Microsoft settles licensing dispute with Internet cafes
Microsoft Korea CEO James Kim, right, with KICCSA Chairman Choi Seung-jae after the former decided to allow operators of local Internet cafes to use its Windows software at more affordable prices, Thursday. / Courtesy of Microsoft Korea
By Kim Yoo-chul
Microsoft Korea will allow operators of Internet cafes to use its software at more affordable prices.
The software company has signed a memorandum of understanding with the Korea Internet Cultural Content Service Association (KICCSA), resolving a long-running dispute over software licensing.
MS Korea asked the association and owners of Internet cafes, also referred to as PC bang (room) here, to pay higher licensing fees for the use of authorized Windows programs on their PCs.
The firm argued that Internet cafes have used copies of their software without paying.
KICCSA refused to accept this and asked the Fair Trade Commission to investigate the case, claiming that MS Korea was abusing its market power.
There are some 20,000 PC bang across the country. The licensing fees they have to pay are estimated at around 300 billion won, which MS can't afford to lose.
"The agreement calls for MS Korea to introduce a new licensing policy on Windows software to support small business operators," stated MS Korea in a release.
MS Korea CEO James Kim said, "The agreement shows MS Korea's commitment to doing business in close cooperation with Internet cafe operators."
The PC bang industry is struggling to stay afloat because it is losing customers to smartphones and tablet PCs.
The settlement comes few months after MS Korea settled a similar licensing dispute with the Ministry of Defense in Korea with the former guaranteeing that it won't seek any additional fees for software use to date.
Now attention is being shifted whether this changed licensing policy will affect an ongoing royalties dispute with Samsung Electronics, said officials.
"Working-level discussions between attorneys from both firms are still underway. The two companies need to narrow differences before reaching an agreement," said an official involved in the matter.
Samsung has threatened to stop paying royalties altogether, claiming that MS's purchase of Nokia invalidates an earlier agreement under which it agreed to pay royalties.