A South Korean Internet portal has filed a complaint with fair trade regulators, alleging Microsoft is shutting out competition by tying a range of application software into its new Windows operating system.

Daum Communications seeks an injunction to block the scheduled October release in South Korea of Windows XP, which includes an instant messaging system, an advanced audio and video player with editing tools, phone service and digital pictures. Daum, which controls 20% of Korea's instant messaging market, filed the complaint Wednesday with the Korea Fair Trade Commission. It appears to be the first legal challenge against Microsoft in South Korea. The release of Windows XP "increases competitors' costs and takes away the opportunity for consumers to compare products on the basis of product quality," said Daum spokesman Kwon Kyung-ah. The U.S. software giant denied the accusation Thursday and said the company would cooperate with the commission investigation. On Thursday the U.S. Justice Department announced that it will no longer seek a court-ordered breakup of Microsoft and that it will not pursue the bundling issues in its protracted antitrust suit against the software giant.