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Microsoft is challenging the regulators. Microsoft is challenging the Fair Trade Commission over their questioning of one of Microsoft’s business practices. We have the highest respect for regulators in Japan; our observation has been that they are thoughtful and judicious, and we wish that every country had such thorough and conscientious regulatory bodies. Microsoft likewise is also showing deference to the FTC’s opinions — it may help that Microsoft has previously benefited from FTC forebearance with other Microsoft practices that have not seen favor with other countries’ regulators — but are challenging an ex post facto portion of the request.
In this case, the issue hangs on Microsoft’s older contracts which required other companies to cede any future assertion of patent rights in order to license Microsoft operating system software. In this case, there are Japanese companies with relevant patents in audiovisual (AV) technology that could be applicable to Windows Media Player. These companies do not want to be forced to cede their patent rights in order to simply license Windows, which is the dominant operating system. Microsoft has already removed the provision from new contracts; the matter now is whether to rescind the provision from all previous OEM contracts.
This portion of the matter will now proceed through the process. Our recommendation to Microsoft (says the ant to the elephant) is to accede in light of how close the positions already are.
