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The European Commission (EU) has reached a preliminary view that Microsoft has undermined consumer choice and infringed EU rules by bundling Explorer web browser with its Windows operating system.

Microsoft and the EU have been involved in legal battles over competition issues for years and last year Microsoft was fined 899m Euros (£680.9m; $1.4bn). This fine was imposed after Microsoft failed to comply with a 2004 riling that it had abused its market position.

An EU statement released on Friday said “Microsoft’s tying of Internet Explorer to the Windows operating system harms competition between web browsers, undermines product innovation and ultimately reduces consumer choice.”

Microsoft is currently studying the commission’s preliminary finding and has eight weeks to reply.

Through the Explorer browser, Microsoft control the majority of the web browsing market. Although, business analysts believe that Microsoft have diversified enormously and are now no longer so reliant on its Windows operating system since they have generate large amounts of revenue from Xbox sales and its server software.

Data compiled by Gfk Chark-Trak suggested that Microsoft’s Xbox 360 was the fastest growing console in 2008 with the sales in the last three months of the year over the double the same period in 2007 in the UK, France, Italy, Spain and Germany.

Chris Lewis, regional VP of Microsoft’s Xbox business in Europe told the gamesindustry.biz website: “With eight million consoles sold since we launched, and consistently out-selling Playstation 3 in EMEA, we’re poised to build on this success in 2009.”