When Microsoft conceded defeat in its nine-year antitrust battle with Europe's competition authorities, another legal challenge became inevitable. Indeed, emboldened by the software giant's submission, its rivals have persuaded Brussels to launch a second investigation with potentially bigger consequences for markets in desktop and internet applications. There may be a case for Microsoft to answer. But the European Commission should try to avoid another protracted legal fight.

Neelie Kroes, competition commissioner, should give complaints by IBM, Oracle (NASDAQ: ORCL - News) and Sun Microsystems (NASDAQ: SUNW - News) a fair hearing. Their allegation that Microsoft has abused the dominance of its Office product by unfairly keeping secret information to hinder the interoperability of rival software is a serious charge. So is the separate claim by Opera, the Norwegian browser company, that Microsoft illegally linked Internet Explorer to its Windows system.

While the Office dossier deals with an entrenched part of Microsoft's business, the other complaint touches on a newer one. The outcome, therefore, will probably be more relevant to businesses and consumers using internet applications. Fortunately, the legal principles established by the earlier case mean the Commission can proceed swiftly. But it should be careful too.

It needs first to consider what the market might achieve without regulatory prompting.

Microsoft's opponents suspect it wants to extend its dominant platform to the internet and that it will try to do so by controlling standards. But it may not succeed. Nimbler rivals such as Google (NASDAQ: GOOG - News) already have applications running on the internet. Microsoft's efforts to set international standards for a new version of Office have hit opposition from governments too. If the market forces the company to open up, then EU action may not be needed.

Second, should the Commission's inquiry uncover evidence of unfair practice, then going on a prosecutorial rampage should be a last resort. That would add only to lawyers' billable hours. Remedies may again be hard to enforce and rendered irrelevant by product evolution.

There are signs Microsoft is ready to respond to a flexible and diplomatic approach. The company's reaction to the investigation has been to stress its co-operation. That is a good omen. It shows that Microsoft has learnt from experience. The company has every incentive to placate the competition regulator. Negotiation could yield results. The Commission's goal is to make software markets more competitive. Its inquiry should be forward looking and not just rake over the past.