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updated 6/6/2004 8:04:11 PM ET 2004-06-07T00:04:11

Microsoft will this week launch its appeal against the European Commission, in a move the company believes might pave the way for a settlement of the landmark antitrust dispute.

The software giant is expected to file an appeal of about 100 pages against the Commission's March ruling by midweek. It said: "We will file the appeal this week and believe we have a strong case to bring to court."

In a separate filing, to be made in the next few weeks, Microsoft will also be seeking to suspend the Commission's decision from taking immediate effect. (MSNBC is a Microsoft - NBC joint venture.)

The company has already informed the competition watchdog of its plans to comply with the formal decision. But it will need to file its suspension request soon to avoid complying with more substantive demands.

In three weeks, Microsoft must offer a version of Windows without its Media Player program. Thirty days later it must share information with rivals. The Commission also fined the company 497 million euros ($608 million) for "abusing its dominant position".

Mario Monti, Competition Commissioner, argues that the measures are needed to stop Microsoft from foreclosing competition. Microsoft says the Commission's remedies are unjustified - particularly because of competition from Linux operating systems in the server market.

The Commission says competition will be squeezed out unless Microsoft licences protocols that link servers to Windows-driven PCs.

Microsoft's request for an interim suspension will be important, as the case could take five to six years to decide.

A decision on the suspension request could come during the summer and is likely to affect the Commission's appetite for proceeding with a new case against Microsoft's XP operating system.

Microsoft has said it might be able to resume settlement talks with the Commission after the Court of First Instance has ruled on the suspension request.

Such a deal might also try to address issues in the pending XP complaint. But the Commission argues that as Brussels is unable to repeal its own decision, it is difficult to see what the two sides would talk about.

Copyright The Financial Times Ltd. All rights reserved.

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