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The European Commission opened a new front on Friday in its epic antitrust battle with Microsoft, hitting the US software giant with fresh charges of unfairly squashing competition.

In a move that could lead to huge new fines, Europe's top antitrust watchdog accused Microsoft of crushing rivals by bundling its Internet Explorer web browser into its ubiquitous Windows personal computer operating system

"Microsoft's tying of Internet Explorer to the Windows operating system harms competition between web browsers, undermines product innovation and ultimately reduces consumer choice," Europe's top antitrust watchdog said in a statement.

"The commission is concerned that through the tying, Microsoft shields Internet Explorer from head to head competition with other browsers which is detrimental to the pace of product innovation and to the quality of products which consumers ultimately obtain," it said.

Microsoft has eight weeks to respond to the charges and can request an oral hearing to state its defence.

But if the company cannot sway the commission, then the commission could slap hefty fines on Microsoft and order it to change its ways.

The Redmond, Washington-based company said in reaction that it was studying the complaint and was "committed to conducting our business in full compliance with European law."

The European Commission and Microsoft have long clashed over the US company's practice of bundling other software such as media players into Windows.

In September 2007, Microsoft lost an appeal before Europe's second-highest court against a fine of nearly 500 million euros that EU regulators slapped on the company in 2004 for abusing its dominant market power.

In February, the commission hit Microsoft with a further fine of 899 million euros for defying its 2004 ruling. Microsoft has lodged an appeal against the decision.

But since the commission's court victory, it has broadened the scope of its actions against Microsoft.