Microsoft has lost its three-year fight to quash a £345m fine from the European Commission (EC) for abusing its dominant market position in Europe.

The Court of First Instance, the second-highest court in Europe, has upheld the March 2004 decision by the EC that found Microsoft guilty of abusing its market position and refusing to disclose interoperability data that would allow rival products to work easier with Windows PCs and servers. It also took the software giant to task over tying the Windows Media Player software
to its market-dominant Windows operating system.

The decision is seen as a significant victory for the EC which is currently investigating other IT companies including Rambus, Intel and Qualcomm, among others.

"The Court has upheld a landmark Commission decision to give consumers more choice in software markets," said Competition Commissioner Neelie Kroes.

"That decision set an important precedent in terms of the obligations of dominant companies to allow competition, in particular in high-tech industries. The Court ruling shows that the Commission was right to take its decision. Microsoft must now comply fully with its legal obligations to desist from engaging in anti-competitive conduct. The Commission will do its utmost to ensure that Microsoft complies swiftly."

Outside the courtroom in Brussels, following the ruling, Microsoft's chief counsel, Brad Smith, said: "It's clearly very important to us as a company that we comply with our obligations under European law, we will study this decision carefully and if there are additional steps that we need to take in order to comply with it we will take them."

Microsoft is expected to make a full statement later today but it is rumoured that the company has had enough of this fight and will not contest the ruling by appealing it to the European Court of Justice.