The European Union is reportedly preparing to deliver a guilty verdict against Microsoft, following a five-year antitrust enquiry.

A source close to the European Commission's (EC) competition department has confirmed that a recent Reuters report suggesting a guilty verdict can be expected was "along the right lines".

And the source added that any fine could in theory be as much as 10 per cent of Microsoft's annual global sales.

The fine that Microsoft faces will not be decided until the EC votes to adopt the ruling, something it is expected to do in June or July. "The EC has never come near to fining anyone that much," the source added. "But then it has never come near to such a colossal antitrust case."

Reflecting the US experience, those involved in the case are struggling to agree on a solution. Case handlers insist Microsoft should unbundle Media Player from Windows packages, and want it to disclose more proprietary information about Windows to its rivals. Such information, they stress, is needed to ensure seamless interaction between, say, a PC running Windows and a computer server running Sun server-software.

However, a panel of antitrust advisers is understood to be worried about the case team's wording of their ruling from both a legal and technical standpoint.

The panel was established to avert more humiliating defeats in the European Court of Justice. Three important merger rulings by the EU were overturned by the court last year. The judges in each case highlighted sloppy economic analysis and procedural errors in EC rulings.

The Commission declined to comment for this story.