Microsoft Under Fire on Two Fronts in Europe

Microsoft is to be forced to fight its regulatory battles in Europe on two fronts after a powerful coalition of technology companies disclosed yesterday that it had lodged a fresh complaint against the software group with the European commission.

The move, which centres on the firm's XP version of its Windows operating system, comes at a sensitive time for Microsoft.

A separate investigation by the commission into the firm's alleged abuse of its dominant position involving an older version of Windows is expected to be completed in the first half of this year.

In a fresh move yesterday the Washington-based Computer and Communications Industry Association - which represents firms such as Oracle, Sun Microsystems and AOL Time Warner - claimed Microsoft had bundled so many hi-tech products into the XP Windows package that rivals were unable to compete.

"Windows XP takes Microsoft's abusive practices to a new level, illegally protecting Microsoft's existing monopolies and ... illegally eliminating competition in new software and service markets," the CCIA said.

The software is also biased towards Microsoft's products, it was claimed, making life difficult for competing products.

The CCIA's attack drew a withering response from Microsoft.

Jim Desler, a spokesman for the Seattle firm, described the complaint as "old arguments and allegations rehashed by a group that is cynically trying to influence the process."

"It would be nice if they could work constructively with the rest of the industry rather than focus exclusively on complaints and litigation," he said.

Another spokesperson said that many of the allegations appeared to have already been settled in the US courts where Microsoft has also had its fair share of regulatory headaches.

The commission said it would look carefully at the new complaint but stressed it would be handled separately from its existing investigation into Microsoft.

That investigation - which has dragged on for more than three years - concerns allegations that the firm deliberately made its Windows operating system incompatible with other firms' servers and media products to muscle them out of the market.

Brussels has formally accused Microsoft of breaking EU competition rules and of abusing its dominant position and is close to delivering a final verdict.

Although it does not have the power to dismember Microsoft it can fine firms up to 10 per cent of their global turnover - potentially an enormous sum for a firm which earns more than $30bn a year.