Europe's top competition regulator said on Monday she wanted to see a significant drop in the market share of Microsoft after the U.S. software giant lost an appeal against an EU antitrust ruling.

A market level of much less than 95 percent would be a way of measuring success, European Competition Commissioner Neelie Kroes told a news conference, referring to the market share of Microsoft's Windows operating system.

You can't draw a line and say exactly 50 (percent) is correct, but a significant drop in market share is what we would like to see, she said.

Microsoft suffered a big defeat earlier when the EU's second-highest court, the Court of First Instance, backed a European Commission ruling from 2004 that the U.S. software giant illegally abused its market power to thwart competitors.

The Commission had decided Microsoft pushed out rivals by bundling Windows Media Player with its operating system and failed to give enough information to makers of server software for their products to run smoothly on Windows.

Kroes' spokesman, clarifying her comments, said abuse of a dominant market position, rather than dominance itself, was against the law.

Once illegal abuse has been removed and competitors are free to compete on the merits, the logical consequence of that would be to expect Microsoft's market share to fall, spokesman Jonathan Todd said.

Kroes also said it was too early to see whether the judgment would affect the Commission's position on Microsoft's new Vista operating system, as well as other cases or complaints such as one involving chipmaker Intel.

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