The European Commission (EC) has launched a formal investigation into Microsoft's activity in the server software market, following a preliminary inquiry earlier this year.
Acting on a complaint by Sun Microsystems, the EC is investigating whether Microsoft breached European Union antitrust rules by engaging in discriminatory licensing and refusing to supply essential information on its Windows operating system to server vendors.
Microsoft has two months to respond to the allegations as part of the investigation, which could lead to legal action against the software giant. Only after having heard the company's defence can the EC make a final decision, which may be accompanied by fines.
Sun alleged that Microsoft had an obligation to disclose the source code of the server interfaces in Windows client software. Microsoft's competitors need to know technical details about the interfaces to develop server operating systems that can talk to the dominant Windows software for PCs.
The release of Windows 2000 in February was, according to Sun, the final step in Microsoft's strategy to drive all serious competition out of the server software market.
The Commission said it believed that Microsoft gave information "only on a partial and discriminatory basis" to some of its competitors.
European Commissioner Mario Monti said: "Effective protection of copyrights and patents is most important for technological progress. However, we will not tolerate the extension of existing dominance into adjacent markets through the leveraging of market power by anti-competitive means and under the pretext of copyright protection."
In a statement, the EC made it clear that the US antitrust case against Microsoft and the allegations that the Commission are investigating are quite different.
The allegations examined by the Commission are that Microsoft extended its dominance in the PC operating system market to the server operating systems market. US Department of Justice case proceedings revolved around Microsoft using its dominance of the PC operating system market to weaken the position of Netscape's Navigator browser and Sun's Java.
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