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Last Updated: Tuesday, 8 June, 2004, 10:32 GMT 11:32 UK
Microsoft to fight record EU fine
Microsoft co-founder Bill Gates
The legal battle could take years
Microsoft, the world's largest software company, has appealed against a European Union ruling that it abused its dominant market position.

In March, Microsoft was hit with a record fine of 497m euros (332m) and ordered to change how it operates.

At the time, the company said it would challenge the decision because it stunted competition and innovation, and limited consumer choice.

Microsoft's Windows software runs on about 90% of the world's PCs.

Pared down

Rivals including Real Networks had complained that the company was bundling software in with the operating system that was not necessary and gave it an unfair advantage.

One of the main bones of contention was Microsoft's media player, software used to play audio and video, as well as to burn CDs.

Critics said bundling the media player in with Windows meant consumers rarely looked for similar products made by other companies.

The EU agreed and told Microsoft in March that it had it had 120 days to reveal details of its Windows software codes so rivals could design compatible products more easily.

It also had to offer a version of its Windows operating system minus the media player within 90 days.

It could, however, still sell Windows with the media player included.

Next step

Microsoft, which has a cash pile of more than $50bn, said the ruling was flawed and it would take appropriate action.

The company's lawyer Horacio Gutierrez said in a statement that: "On Monday, June 7, we filed our appeal against the European Commission's decision with the EU's Court of First Instance in Luxembourg".

A company spokesman said that Microsoft would file for a supension of the penalties imposed by the European Commission.

The ensuing legal battle could run for anything up to seven years, experts estimate.

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