Global tech giant Microsoft has been involved in a string of rows with local government agencies and companies on the grounds that they infringe a copyright on accessing to its server and database.
Local media outlets reported on Tuesday Microsoft claimed that the state-run Korea Power Engineering Company violated the American firm’s copyright.
The tech firm reportedly sent an official letter to the government agency, saying that “KEPCP violated its Client Access Licenses regarding it distribution automation system,” and called for using genuine products.
A Client Access License is a software license distributed by Microsoft to allow clients to connect to its server software and use the software's services. The license is a must for many Korean government agencies and companies, which have a high reliance on the tech firm’s window and server systems.
KEPCO needs to have licenses for its 189 central control units and 87,000 distribution line control units, but it only has 2,559 licenses, according to Microsoft, which is claiming that the power company is violating license rules and infringing on intellectual property.
It is not yet sure whether Microsoft would file a lawsuit against KEPCO but if it does so, the lawsuit amount would reach around $50 billion won, market observers said.
“The letter was sent in order to inform them of Microsoft’s license policy. We are willing to settle down through reasonable solution without filing a lawsuit,” said an official from Microsoft.
KEPCO also said, “We are working to find out whether there is legal violations through relevant division. We will come up with a counterplan accordingly.”
Microsoft’s conflict over licenses issue with government agencies or companies is not the first time in South Korea. In 2012, the tech firm demanded extra payment from the Ministry of National Defense regarding Client Access Licenses amounting to 200 billion won. The legal dispute lasted for over two years and they finally settled down on condition that MND would use more Microsoft’s software.
In other cases, Microsoft brought a subject as the messenger for education used by 700 public schools nationwide violated the company’s license rules. The dispute was settled down as the company which developed the messenger pay the costs.
This March, the American tech firm also raised a hare against the National Policy Agency, saying it is using illegal copy of Microsoft Window. Police said it installed two hard disks for every computer in a bid to prevent outside attacks such as hacking, saying “It is too much to require extra license fee for two hard disks for one computer.” Both are reportedly conducting negotiations under the table to solve the issue.
Microsoft has a long conflict with Internet cafes in South Korea. The owners, who can’t afford Window updates amounting to over 100,000 won per computer, used illegal copies for a certain period. After the tech firm accused them, they recently settled down by allowing the owners to use the software at “reasonable price.”
Some market watchers say reason behind the Microsoft’s aggressive action is that the tech firms is currently being in a difficult position without finding new growth engine. It lags behind other tech giants such as Google and Apple in terms of mobile operating system and software market. Worse, it is now fiercely competing with global firms in the corporate server market.
With new business order reducing from governments and businesses, Microsoft is taking measures to maximize their profits from existing clients, analysts said. The firm’s sales related to consumer licenses dropped 25 percent from the same period of last year.
