Mr Paku Khan, a case officer working at the Competition Authority, found himself at the centre of one of the world's biggest antitrust rulings this week.The US lawyer, who joined the authority last year to beef up its investigative unit, spent most of Monday in Brussels outlining the European Commission's draft ruling on Microsoft to other European Union member-states

As rapporteur of the European Council's advisory committee on restrictive practices and dominance, Mr Khan framed the questions put to the Commission by member-states on the ruling. He also voted Ireland's acceptance of the decision that could potentially undermine Microsoft's iron grip on the software industry.

"The vote for the decision was unanimous," says Mr Khan, who acted as rapporteur because of Ireland's position as presidency of the European Commission. "It is the role of the member-states to stress-test a draft decision, and Ireland had a unique role in this."

Microsoft, which is a major employer in the Republic, held regular briefings with the Tánaiste and Taoiseach's officials in the lead-up to the Commission decision. But the Government denies the firm lobbied it to vote against the Commission's ruling. This ruling found that Microsoft broke EU competition law by leveraging its near-monopoly position in the market for operating systems - the interface through which consumers interact with computers.

The Commission fined the software firm €497 million and proposed remedies in an attempt to level the playing field for rivals.

The remedies will force Microsoft to reveal the interface codes that enable different types of software to talk to one another within 120 days to rivals such as Sun Microsystems. This should enable rival software makers' products to work better in conjunction with Microsoft's server and operating system, Windows.

Microsoft will also have to provide computer manufacturers with stripped down versions of its dominant Windows software, which do not have its audio-visual product Media Player.

This should help firms such as Real Networks, which will be able to negotiate with computer manufacturers to have their own audio-visual software embedded into the Windows Systems. It could also set a precedent for the future by enabling the Commission to prevent Microsoft from "tying" software releases into its ubiquitous Windows software.

Gartner, the global technology consultancy, issued a note to its clients yesterday claiming the decision would have little impact on Microsoft customers. But it also highlighted that Microsoft must now weather the uncertainty and threat of legal action if it bundles other functionality, such as telephony or antivirus software protection, into its popular Windows operating system.

Mr Joe Macri, Microsoft Ireland general manager, says he is "disappointed" by the ruling but it will not have any material impact on the firm's Irish-based operations. "What we have learnt from the past is that business as usual is the best approach," he says.

Despite Microsoft's attempt to play down the implications of the ruling, company insiders freely admit that the bad PR created by lengthy legal battles and the drain on management time will hurt the firm in the long term.

Therefore, it is no surprise that Microsoft's rivals warmly welcomed the Commission ruling.

Real Networks general counsel Mr Dave Stewart described the decision as "fundamentally significant" as the Commission had ruled that Microsoft's strategy of bundling Media Player into its software was illegal.

Mr Lee Patch, vice-president of legal affairs at Sun Microsystems - the firm which made the original complaint against Microsoft to the Commission in 1998 - told The Irish Times the firm was very satisfied with the ruling.

But he warned that Microsoft would attempt to delay the Commission decision as long as possible in an attempt to maintain its dominance in the market.

"I don't believe the culture of the firm has changed," said Mr Patch, who has spent most of the past decade fighting Microsoft through the US court system.

Indeed, many experts remain cautious about the long-term implications of the Commission's decision for Microsoft because of the uncertainty that its imminent legal appeal will create.

"It is likely Microsoft will request enforcement of the decision to be suspended pending an appeal," says Mr Philip Nolan, solicitor at Mason Hayes Curran. "It is also likely that the European Court of First Instance will take a pragmatic view and grant this application."

This type of appeal could take years to decide and, by that stage, software will have evolved in such a way that it could render parts of the judgment obsolete, according to Mr Nolan, a specialist in technology legislation.

The legal process is often particularly ill-suited to determine issues in the fast-moving world of technology. A good example of this is provided by the US Department of Justice's investigation of Microsoft's practice of "tying" Internet Explorer into Windows. By the time the investigation was eventually concluded, Netscape - Microsoft's chief rival in the browser market, had been aggressively pushed out of the sector.

But Dr Gorecki, a director of the Competition Authority who has worked on the Commission's Microsoft case for three years, says the decision was carefully put together and well written.

It will also set a powerful precedent for "network industries" and technology in the field of competition law, he added.

Unsurprisingly, the ruling by the European Competition Commissioner, Mr Mario Monti, against Microsoft provoked criticism from across the Atlantic.

Senate Majority Leader Mr Bill Frist, a Republican from Tennessee, described the requirement that Microsoft change the way it designs and sells Windows as "preposterous". "I now fear that the US and the EU are heading toward a new trade war - and that the Commission's ruling against Microsoft is the first shot."

Clearly, the Commission's ruling is just the first shot in what could become a very long battle.