A South Korean court on Thursday found US software giant Microsoft Corp guilty of violating anti-trust regulations, but dismissed compensation demands by two rival South Korean companies.

The Seoul district court ruled that the world's largest software provider had abused its dominant market position by bundling programmes with its Windows operating system.

"Microsoft's sales practices breached fair competition regulations by bundling its related programs, abusing its market dominance," the judges were quoted as saying by the Yonhap news agency.

However, the court rejected 40-billion-won (32-million-dollar) compensation lawsuits by Digito. com and Sanview Technology Inc, two South Korean software companies, saying there was no proof damages suffered by the companies were linked to Microsoft.

"The companies were ousted from the market, either by lack of price competitiveness or overseas business failure," the court said. "It has not been proven that the damages are linked to Microsoft."

Already in 2006, South Korea's competition watchdog levelled a 33-billion-won fine against Microsoft, demanding that the company offers its MSN Messenger and Media Player separate from its Windows operating system.