The European Commission plans to fine Microsoft massively for antitrust violations.

The Wall Street Journal reports the Commissions' allegation that "Microsoft misled investigators and sought to obstruct the case", and as a result will impose the largest fine it can while demanding that Microsoft removes some features from its Windows software.

The allegations of attempting to mislead focuses on a series of letters from customers which Microsoft supplied the Commission.

Silence EU Commissioner for Competition Mario Monti refused to comment on the substance of the investigation, including details of the supposed misleading letters, when questioned in Brussels yesterday.

Under EU law, Microsoft can be fined up to 10 per cent of its annual revenue, or $2.5 billion, the report said.

Monti refused to be drawn on the news, saying: "To speak of fines when Microsoft has not even replied is premature. To enter this game of calculating a fine does no service to the public at large." Microsoft has been given a little extra time to make its response to the case, Monti said.

Dominant position The EU has been deliberating whether Microsoft had violated European antitrust rules through "using illegal practices to extend its dominant position in the market for personal-computer operating systems into the market for low-end server operating systems".

The EU has charged that Microsoft has been actively attempting to dominate the corporate and Internet computer software market with its Windows and Office software, while also attempting to put a stranglehold on competing software for operating music and video over the Web, all in violation of European antitrust laws.

Though initially Microsoft was tight-lipped about the matter, saying that EU investigations are confidential in nature and it was respecting that confidentiality, the company later responded to Monti's comments.

"We can confirm that we have not done anything to violate antitrust laws or to mislead investigators," a spokeswoman for Microsoft in the UK said.