Microsoft in a legal filing Friday denied all charges brought against it last year by rival RealNetworks and argued that RealNetworks has no right to complain.

RealNetworks sued Microsoft in December alleging that the software giant illegally used its monopoly powers to control the digital media market. The suit, filed in federal court in San Jose, Calif., seeks damages that could exceed $1 billion, RealNetworks said last year.

RealNetworks accuses Microsoft of engaging in a broad range of predatory practices to protect its operating system monopoly and conquer the digital media space. These tactics include product bundling, restrictive licensing, exclusive dealing, predatory pricing, and refusing to sell unbundled operating systems, according to a copy of the complaint.

Microsoft denied all those charges. Additionally, the company stated that the digital media market is competitive and RealNetworks' claims are barred because the company cannot demonstrate any antitrust injury and has not suffered any damages. Microsoft's actions constitute permissible competitive activity, according to a Microsoft statement.

The IDG News Service is a Network World affiliate.