Microsoft has lodged an appeal against a record €899 million (£713 million) fine handed out in February by the European Commission for defying sanctions imposed on the company for abusing its dominant position in the software market.

As the battle between the American software giant and European regulators enters its tenth year, Microsoft said yesterday that it had filed an application to the European Union Court of First Instance to annul the Commission’s decision of February 27.

“We are filing this appeal in a constructive effort to seek clarity from the court,” it said.

The fine – the largest levied on any business – came on top of a €497 million penalty that Microsoft was forced to pay in 2004 and the €280.5 million it paid in 2006, bringing the total that the company has been forced to pay the Commission to €1.68 billion.

The Commission responded yesterday by saying that it was confident that the latest fine was “legally sound”.

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 that ensures that devices such as printers are able to communicate with computers running on Microsoft Windows.

Microsoft was ordered to provide the information and 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 that Microsoft was charging and that 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.

This year’s record fine 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 that 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.

The group’s fractious relationship with Brussels regulators is far from being repaired. Last month the Commission opened two further investigations involving the company and its Internet Explorer web browser.

The inquiries were prompted after Neelie Kroes, the Competition Commissioner, received complaints that Microsoft had unfairly tied its web browser to its Windows operating system and was making it difficult for competitors to work with Windows by not disclosing sufficient interoper-ability information.

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