The European Commission fined Microsoft a record €899 million (£673 million, $1.4 billion) today for defying sanctions imposed on the company for abusing its dominant position in the software market.

The fine — the largest levied on any business — was imposed in addition to the €497 million penalty Microsoft was forced to pay in 2004 and the €280.5 million it paid in 2006, bringing the total the company has now been forced to pay the Commission to €1.68 billion ($2.5 billion).

The Commission said in a statement that no company had ever ignored the sanctions it had imposed as a result of anticompetitive behaviour.

“Microsoft was the first company in 50 years of EU competition policy that the Commission has had to fine for failure to comply with an antitrust decision,” Neelie Kroes, the Competition Commissioner, said.

"I hope that today's decision closes a dark chapter in Microsoft's record of non-compliance with the Commission's March 2004 decision," she added.

Microsoft said in a statement that the fines related to "past issues" that had been resolved, and that as of October last year it was in "full compliance" with the Commission's 2004 decision.

In 2004, the Commission ruled that Microsoft had stifled competition by bundling up its media player software with its dominant Windows operating system.

It also said that Microsoft had withheld information from the makers of other software which ensures that machines such as printers are able to communicate with computers running on Microsoft Windows.

Microsoft was ordered to provide the information.

It agreed to do so, but said that it would charge royalties because the protocols it was releasing amounted to valuable intellectual property.

The Commission found that the information was not sufficiently innovative to warrant the amount was Microsoft was charging, and the royalties were unreasonable.

At the time, the Commission fined Microsoft €497 million, which was followed by a further €280.5 million in July 2006 when the company failed to comply with the imposed sanctions.

Today's fine picks up where the second charge left off, and amounts to the sum of daily penalties Microsoft accrued between July 2006 and October last year, when it agreed to reduce the royalties it was charging rival software makers.

Microsoft initially set its royalty rate at 3.87 per cent of the revenues from any product which licensed one of its patents.

In March last year, European authorities said that the rate was unfair, and two months later - under threat of further fines - Microsoft reduced it to 0.7 per cent.

In September last year, Microsoft lost its appeal against the Commission's original 2004 decision and fine.

In a landmark ruling, the European Court of First Instance held that the software firm had abused its dominant position in an attempt to cripple the competition, and ordered it both to share important software codes and sell its products separately, rather than bundled together.

Microsoft executives said they would abide by the court's decision, and in October agreed to reduce the company's royalty rate for patent licenses to 0.4 per cent.

They also said the company would charge a flat fee of €10,000 for information that would ensure that other companies' products could interact with Microsoft software.

Last week, Microsoft began providing additional information which, it said, would ensure "interoperability" between its own and other products.

The company released 30,000 pages worth of protocols which would help software makers write programs that could communicate with some of the Microsoft's flagship products, including the Vista operating system, Office 2007 and Exchange Server 2007.

Microsoft's long-running dispute with the European Commission is not yet concluded, however.

In January, the European Commission opened two new anti-trust investigations into Microsoft's practices - one concerning inoperabilitity, the other about the bundling together of separate software products following a complaint by the maker of a rival web browser to Microsoft's Internet Explorer.

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