EU confirms record Microsoft fine

Microsoft has been hit with a €497m (£331m) fine and other penalties by the European Commission for the company's anti-competitive practices involving its Windows Media Player software.

The fine is just over one per cent of Microsoft's cash reserves.

The Commission's ruling states: "Microsoft Corporation broke European Competition law by leveraging its near-monopoly in the market for PC operating systems onto the markets for work group server and for media players."

The ruling states that, as "the illegal behaviour is still ongoing", it has ordered Microsoft to disclose to competitors within 120 days "the interfaces required for their products to be able to 'talk' with the ubiquitous Windows operating system".

The company is also required, within 90 days, to offer a version of Windows without Windows Media Player to PC manufacturers or when selling directly to end users. But it can continue to offer a version including the Media Player.

Microsoft will need to produce and maintain two versions of the current - and potentially future -versions of Windows.

Competition commissioner Mario Monti said in a statement: "Today's decision restores the conditions for fair competition in the markets concerned and establishes clear principles for the future conduct of a company with such a strong, dominant position."

Microsoft is expected to announce its intention to appeal the decision within hours.