The decision is seen as a key victory for the European competition regulator, and a serious blow for the US software giant, in the long-running competition dispute.
The European Court of First Instance rejected Microsoft's appeal against a record €497million fine imposed by the European Commission three years ago.
The court upheld an earlier 2004 ruling that Microsoft had abused its dominant market position, using its dominant 95% market share of the personal computer operating systems market to freeze out rivals.
The court upheld the earlier ruling that the software group had broken competition rules in two ways.
The first type of conduct found to constitute an abuse was Microsoft's refusal to supply rival companies with "interoperability information" – crucial information about the Windows operating system.
By way of remedy the Commission requires Microsoft to disclose the "specifications of its client/server and server/server communication protocols to any undertaking wishing to develop and distribute work group server operating systems."
The second breach was that by bundling its Windows Media Player with the Windows PC operating system, this undermined competition from other media player providers.
By way of remedy here, the Commission requires Microsoft "to offer for sale a version of Windows without Window Media Player."
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