Microsoft denied European Union (EU) allegations that it violated antitrust rules and misused its dominance of the computer industry.

In a 102-page memo to the EU filed earlier this month, Microsoft said its products can be used with those of rivals and denied engaging in abusive or discriminatory licensing agreements aimed at shutting competitors out of the market. Microsoft is trying to resolve the EU case at the same time a federal judge in Washington, D.C., reviews the company's proposed antitrust settlement with the U.S. government and states that sued the largest software company. The European Commission, the EU's regulatory arm, said Microsoft may have violated antitrust rules by illegally trying to extend its dominant position in personal-computer operating systems into the market for low-end server operating systems. The company's Windows operating system runs 95 percent of the world's personal computers. Server computers store and deliver information for computer networks. Low-end server systems are cheaper devices usually used for keeping files, printing and storing Internet data. Rivals say Microsoft controls as much as 60 percent of the low-end market. The company, in its response, argued that regulators shouldn't carve up the market for servers. Microsoft defended its licensing policy and bundling of its multimedia products. The EU had said Microsoft illegally ties its Media Player with Windows. Microsoft spokeswoman Tiffany Steckler declined to comment. Microsoft's competitors and customers have until Jan. 7 to file a response to Microsoft's arguments, the sources said.