Microsoft still hopes to settle with the European Commission over the sanctions ordered against it to correct its anticompetitive behaviour, even as its appeal of the case winds its way through the legal channels, a senior company executive said today.

"We definitely want to settle. We just said it in court and I'll say it again," Jean-Philippe Courtois [CQ], Microsoft's chief executive officer for Europe, the Middle East and Africa (EMEA), said at the Etre technology conference in Cannes.

The Commission ruled last March that Microsoft had abused its dominance in the PC operating systems market to gain an advantage in related markets, such as that for media players.

It ordered the company to pay a fine of €497 million, or more than $600 million, and offer a version of its operating system without the Windows Media Player (WMP). It also ordered it to reveal enough Windows code to allow rivals to build competing server software that works well with Windows.

Microsoft is attempting to get those behavioural remedies suspended pending its appeal. The request for a suspension is being considered by the European Union's Court of First Instance, which held a two-day hearing on the matter September 30 and October 1.

"We agreed on a settlement initially, but the Commission felt that it had to set a precedent," Courtois said. The sanctions set a worrisome precedent because they will affect companies' ability to innovate, he argued.

"At the core of the issue is innovation. We want to be able to innovate, to make a plan and to act on it," said Courtois, who oversees Microsoft's business in some 60 countries.

The record fine, which Microsoft has paid and is being held in a special account until the case concludes, and the unbundling of WMP, were not of real concern for the company, he said.