Despite last-minute talks, it was unable to prevent the US Department of Justice and more than 19 states from starting new, wide-ranging, anti-trust lawsuits.

And there are several lawsuits already outstanding.

Company appealing against earlier decision

Siobhan Kennedy of Computer Weekly tells BBC Radio 5 Live: "Microsoft's rivals are very upset" (2'48")

A US district court has ordered Bill Gates's multi-billion-dollar enterprise to supply a version of its Windows 95 operating system without its own Internet Explorer browser. The company is appealing against that decision.

Windows 95 has also been affected by the legal battle

The Justice Department, headed by US Attorney General Janet Reno, first locked horns with Microsoft in 1993. Its investigations have evolved into a full-blown anti-trust case against what is the third largest company in the world by market value.

While all the details of the case would test the memory of a powerful desktop PC, there is just one central issue at stake: Does Microsoft wield too much power in the IT industry?

Critics say it does. They want the US government to rein in the company. Their argument is based on the belief that monopolies pose a danger to the healthy running of a competition-based, capitalist economy. Their case is bolstered by the fact that IT is now so important to America's economy.

Hi-tech industry accounts for 30% of the increase in US gross domestic product since 1994, making it a major factor in the country's 1990s economic revival.

PC boom has elevated Microsoft to virtual monopoly status

The peril of monopolies is well-established in America. Anti-trust laws have been on the books for 100 years. In extreme cases, they have been used to break up dominant companies.

The prevailing wisdom is that monopolies stifle creativity and innovation, crush competitors or buy them up. And if, for whatever reason, the market leader collapses, there is no major rival to step in.

Microsoft's critics say the software juggernaut poses a danger not just to the stability of the software sector, but also to the US economy and the world.

But Microsoft and its supporters have hit back with their own forceful argument: "If it ain't broke, don't fix it."

The software industry is like no other, they say. It functions best around a single, standard operating system - in this case Microsoft's Windows. The system is used on 90% of desktop computers.

Will Bill Gates have egg on his face again?

Having one standard cuts costs by creating economies of scale for other software firms. It also means greater efficiency for the millions of people who use PCs since they "speak" the same language.

Supporters also say that Microsoft is no traditional monopoly because it does not rest on its laurels. It continually updates products and spends more than most of its competitors combined on research and development.