A European court said yesterday the European Commission was wrong to dismiss a French software wholesaler's complaint against Microsoft, possibly opening a new regulatory battle for the US giant.

The Court of First Instance, the European Union's lower court, said the Commission failed to consider Micro Leader Business' allegations that Microsoft Corp had abused a dominant position when it took steps to prevent the French firm from purchasing lower priced software in Canada for resale in France.

Micro Leader alleged in a complaint to the EU Commission in 1996 that Microsoft had violated EU antitrust rules when the US firm banned it from reselling French-language software, effectively entering into direct competition with the Seattle-based giant and its authorised French subsidiary.