Europeans will get a full version of Windows 7 at upgrade prices
Microsoft will not be offering an upgrade version of Windows 7 in Europe.
In the past Microsoft has given people already using Windows a chance to upgrade to a new version when it becomes available.
While that option will be offered in the US, Microsoft said its efforts to comply with competition regulations meant it could not do so in Europe.
European regulators dismissed the claim, saying the move limited choices rather than opening them up.
Windows 7 is due to go on sale on 22 October around the world.
Anyone buying a new PC between now and then - running Windows Vista Home Premium, Business or Ultimate - will get the chance to upgrade the operating system on it, at no cost, to Windows 7.
While Microsoft will not charge for the upgrade, some PC makers may impose a fee to ship disks with Windows 7 on them to customers.
The worldwide upgrade option programme is due to begin on 26 June.
Those who want to upgrade to Windows 7 on a older PC will pay a reduced price for the software. Stand alone versions of Windows 7, that can run on more than one PC, will also be available.
Microsoft said these upgrade options will not be available to Europeans.
"We will not be able to offer an upgrade product within Europe," said John Curran, Windows business lead at Microsoft UK, adding that only the full version of the software will be available to Europeans.
In Europe, Microsoft will send buyers of new PCs a full version of the software rather than an upgrade version. The European edition will lack Internet Explorer.
Europeans who want to get hold of Windows 7 but have not bought a new PC will be able to buy it at a discount. In the UK, the Home Premium edition of Windows 7 will be £79.99 until 31 December 2009.
WINDOWS 7 DISCOUNT PRICES
Home Premium - £79.99
Professional - £189.99
Ultimate - £199.99
By contrast buying this edition after 31 December will cost £149.99.
The upgrade option was not available, Microsoft said, because it was trying to comply with European competition regulations. This means that IE is not onboard Windows 7 in Europe.
A Commission spokesman dismissed Microsoft's claim that it was taking the action to comply with European laws.
WINDOWS 7 RETAIL PRICES
Home Premium - £149.99
Professional - £219.99
Ultimate - £229.99
"The essential point of our case is consumer choice," said the spokesman.
"We would want to look extremely closely at the terms under which Microsoft is making Internet Explorer available to computer manufacturers," he said.
"If the effect of the technical separation of Windows and Internet Explorer is neutralised by particular terms and conditions they offer to manufacturers to install Internet Explorer, they're no better off."
The preferred remedy for Europe, he said, was to offer users a screen when they first switch on Windows 7 that gives them a choice between IE, Chrome, Firefox, Safari or Opera.
"For them to claim that this is somehow imposed by the Commission or is going to resolve the problem with the Commission is far from clear," he said.
"It's certainly not because we've asked them to do it."