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About South Korea's 'dependency' on Microsoft

CNET News.com's Michael Kanellos says South Korea might be in bed with Microsoft, but PC users there are kicking the company hard.

A couple of people recently have alleged that South Korea is being pushed around by Microsoft. It's not nearly as bad as it sounds.

"This nation is also a unique monoculture where 99.9% of all the computer users are on Microsoft Windows. This nation is a place where Apple Macintosh users cannot bank online, make any purchases online, or interact with any of the nation's e-government sites online," wrote South Korean blogger Gen Kanai. Commentators on technology news site Slashdot have also tsk-tsk-ed the situation.

The pending release of Vista has prompted many to speculate that it could increase security risks.

To some, this looks like the ugly face of monopolism and bad decisions by government leaders and large corporations. But there is actually a much simpler reason why people in South Korea have so much Microsoft software.

They steal it.

Piracy is rampant in the nation. During my visit to the country two and a half years ago, one of the most entertaining topics was how businesses dodged police raids for pirated software. They sounded like tales from Prohibition.

Do people want to steal software? No, but they worry about costs and staying competitive, and right now many believe the risk of piracy is worth it.

In the city Incheon, near Seoul, police investigators who were empowered to audit software on PCs snuck in through an office building's back exit, according to a source who worked for an Internet service provider inside the facility at the time. A receptionist immediately began to call all the businesses in the building.

"Everyone closed their doors," the former ISP employee said at the time. The ISP wasn't so lucky. Its employees didn't get out in time, and the company had to pay $42,000 (50 million won) in software licenses and fines.

At another building, someone held the door closed while other people shoved laptops out the window, I was told. Two other people I spoke to--the president and the chief technology officer of a growing company--went out for lunch one day, but then had to hide in the next-door parking lot for two hours until a surprise raid ended at their building.

People laughed when they told me these stories, and not just because it was 2 a.m. One of the more popular methods of avoid ing the law apparently is to befriend someone in the government who can divulge the timing of a pending raid. A companywide holiday is then declared.

Do people want to steal software? No, but they worry about costs and staying competitive, and right now many believe the risk of piracy is worth it. Intellectual property rights are also a little tough to enforce sometimes. In Seoul, there is a Samsung Wedding Chapel, but it's not owned by the Samsung Electronics conglomerate. The country sometimes feels like the wild west with big-screen TVs.

"They just close the door, because they know it is the fastest way to get away," said a Microsoft representative at the time.

The government and Microsoft work together closely because piracy creates trade headaches for South Korea's . The country depends on exports, and the last thing its government and business leaders want is to have to deal with questions that put them on the defensive. Piracy also hurts the local software market.

P.S.: The government keeps fines levied in raids. Granted, I haven't been back to South Korea, but statistics from the Business Software Alliance, the industry antipiracy and security advocate, show that things probably haven't changed: 46 percent of the software in 2005 was pirated in the country--the same rate as in 2004.

To help get around this, and to develop its own software industry, South Korea is actively engaged in developing a Linux industry. If desktop Linux starts to gain in popularity, this is one of the countries it will happen in.

And why isn't there much Apple presence in South Korea? It probably has something to do with price. Apple computers cost more than typical PCs. The company also likely never targeted South Korea in its early days, so the brand isn't as strong there. Either way, in the mass computer malls around Seoul, the guys at the Apple stores often just seemed to be sitting around waiting for customers.