Microsoft faces more problems in South Korea after a company sued the US software giant over its bundling of Windows Media Player with the Windows OS (operating system).

The suit was filed in the past week, just as Microsoft lodged its appeal against a December ruling by the KFTC (Korea Fair Trade Commission) that levied fines and other punishments on Microsoft because of its business practices in South Korea.

Sanview Technology is suing Microsoft for $10m (about £6m) in compensation for damages allegedly caused to the company by Microsoft's inclusion of Windows Media Player with its OS, said JL Yoon, a general director of Sanview, in a telephone interview.

"Microsoft is selling [its product] as a bundle and so we have many difficulties selling our product," he said.

Sanview is a privately held company with headquarters in California and an office in Seoul. Its media player is an H.264-based client that can be used to view video streaming services.

Microsoft declined comment on the suit in an emailed statement. "Until we have an opportunity to fully review the complaint we're not in a position to comment on this case," it said.

In 2001 local portal operator Daum Communications filed a complaint with the KFTC over Microsoft’s bundling of Windows Messenger with its OS. Daum has its own instant messaging software that competes with Microsoft. A lawsuit over the same issue followed in 2004, but Daum withdrew both complaints last year when it agreed to accept a package worth $30m (£17m) from Microsoft that included a cash payment of $10m – the amount now being asked for by Sanview.

The KFTC picked up the issue, however, spurred on partly by a related complaint filed by RealNetworks against Microsoft's bundling of Windows Media Player.

Last December the KFTC released its findings and fined Microsoft 33 billion won (£18m) for violating fair trade regulations. It also ordered the company to offer two versions of Windows: one full version and one with Windows Messenger and Windows Media Player removed.

On Monday, Microsoft appealed to the Seoul High Court seeking to overturn the KFTC's ruling.