EU may fine Microsoft

Competition Commissioner Mario Monti has raised the possibility of a fine

Microsoft could be in line for fines totalling up to $2.5bn (£1.75bn) levied by the European Commission.

But the Commission says its investigation is still at an early stage.

A leaked report cites an EC document which alleges that the software giant's monopoly squeezes out competition, and that it actively lied when it presented evidence in its support by client companies.

"To speak of a fine when Microsoft has not yet disputed the Commission's preliminary findings both in fact and in law, as is its right, is premature," European Commissioner for competition Mario Monti said.

However he added: "A fine is of course always a possibility."

Commissioner Monti declined to comment on the substance of the case against Microsoft and added that a statement of objections - outlined in a Wall Street Journal report - is a preliminary stage in the investigation.

Fine?

The Commission could not only fine Microsoft up to 10% of its turnover, but could also insist that it drops some features of its Windows operating system, according to the Wall Street Journal report.

The Commission alleges that Microsoft deliberately designed its Windows 2000 software so that it would be incompatible with rivals' software.

The EC alleges that Microsoft illegally sought to dominate music and business software for the web.

It says that bundling new features into Windows and Windows server software "has a chilling effect on innovation and competition," according to the report.

That kind of wording is almost identical to that used by the companies which have complained to both Brussels and the US Justice Department about Microsoft's behaviour.

Microsoft commitment

A spokesman for Microsoft told the Wall Street Journal: "We remain committed to working with the Commission to resolving this."

On Tuesday, the US Supreme Court rejected Microsoft's request to throw out a ruling that it violated competition laws.

The decision means that the computer giant must be sentenced in a lower court for violating anti-trust laws, although the judge presiding over the case has urged an out-of-court settlement.

The Supreme Court's decision will come as a blow to the software giant, which has been attempting to get the case against it thrown out altogether.