Fears over Longhorn, Microsoft's next big version of Windows, were responsible for last week's collapse of settlement talks with the European Commission, the FT claims.

Brussels is concerned that Microsoft will bundle even more features into Longhorn and thereby exclude even more competitors. The EC is already investigating Windows XP. Longhorn is due for release in 2006.

The Commission will reveal its punishments of Microsoft for past anti-competitive behaviour on Wednesday, 24 March. This is expected to include restrictions on future conduct imposed against the firm.

Member states are meeting today to decide on how a big a fine to impose. Die Welt predicts a fine of €200m as part of the settlement.

Microsoft is almost certain to appeal.

In somewhat connected news, Nebraska is reviving its case against the software giant under its consumer protection laws. The state's supreme court ruled in favour of two Nebraskans suing Microsoft for using its monopoly position to overcharge for software. ®

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