The Seattle-based company could face upwards of three billion dollars in fines from the European Commission if found guilty of using its dominance to crush rivals.

But the first day of the closed-door inquiry ended with a mood of anti-climax as observers said there was little new to report.

They said the company produced much repetition but no new revelations.

It will continue its case Thursday, with the hearing due to end Friday after hearing from other parties.

Microsoft reiterated its desire to find a "positive solution" to the case.

"During our time today, Microsoft technical and economic experts presented information on server operating systems and multimedia playback technologies, and provided content around existing consumer choice and interoperability in the marketplace," the company said in a statement.

Microsoft is accused of abusing the dominance of Windows -- which is installed in 90 percent of all personal computers (PCs) -- to fend off competing applications.

This week's hearings revolve around charges that Microsoft has tried to squelch rival products to its Windows Media Player, such as RealPlayer and Apple QuickTime.

And it is accused of trying to squeeze out other firms in the market for "low-end servers" -- computers that provide e-mail and other services to multiple users.

The online media market is seen as one of the crucial growth areas that will shape the computer industry for years to come, as more and more users venture into cyberspace to listen to music or watch films.

Control of the servers that provide such services would give Microsoft extraordinary additional clout to dictate terms to PC manufacturers.

Bill Gates' company secured a settlement with the US Justice Department in November 2001 that was condemned by other firms as inadequate. Appeals against the settlement are drawing to a close.

The European Commission has said Microsoft must come up with "very convincing" arguments to head off an adverse judgement and the threat of fines.

The Commission has already detailed preliminary remedies that would require Microsoft to strip Media Player from Windows and reveal product secrets for its servers to rivals.

Fines of up to 10 percent of the company's global revenues could also be in the offing. Microsoft could therefore be forced to stump up 3.2 billion dollars to the EU, after posting revenues of 32.19 billion dollars in

However, past EU fines against companies accused of monopolistic practices have ranged from 0.1 percent to just over 1.0 percent of the firm's revenues.

A final decision by the Commission in the Microsoft case is unlikely before early 2004, sources say.

Underlining the trans-Atlantic ramifications of the Microsoft investigation, lawyers from the US departments of justice and commerce were reported to be attending the hearings.

SPACE.WIRE