EU fines Microsoft record £680million for charging rivals 'unreasonable prices' for software information

EU regulators said the company charged "unreasonable prices" until last October to software developers who wanted to make products compatible with the Windows desktop operating system.

The fine is the largest ever for a single company and brings to just under £1.3billion the amount the EU has demanded Microsoft pay in a long-running antitrust battle.

Microsoft immediately said that these fines were about past issues that have been resolved and the company was now working under new principles to make its products more open.

But EU Competition Commissioner Neelie Kroes warned that the company was under investigation on two other separate cases.

She was sceptical over licence changes the company announced last week, saying: "Talk is cheap. Flouting the rules is expensive."

She said Microsoft's actions stifled innovation, hurting millions of people who use computers in offices around the world - and that the fine was "a reasonable response to a series of quite unreasonable actions".

Microsoft fought hard against a March 2004 decision that fined it £376million and ordered it to share inter-operability information with rivals within 120 days, taking an appeal to an EU court that it lost last September.

It was fined again in July 2006 - £212million - for failing to obey that order.

The EU alleged that Microsoft withheld crucial inter-operability information for desktop PC software - where it is the world's leading supplier - to damage rivals who make programs for workgroup servers that help office computers connect to each other and to printers and faxes.

The company delayed complying with the EU order for three years, the EU said.

And it only made changes on October 22 last year to the patent licences it charges companies that need data to help them make software that works with Microsoft.

Microsoft had initially set a royalty rate of 3.87 per cent of a licensee's product revenues for patents and demanded that companies looking for communication information - which it said was highly secret - pay 2.98 per cent of their products' revenues.

The EU complained last March that these rates were unfair. Under threat of fines, Microsoft two months later reduced the patent rate to 0.7 per cent and the information licence to 0.5 per cent - but only in Europe, leaving the worldwide rates unchanged.

The EU's Court of First Instance ruling that upheld regulators' views changed the company's mind again in October when it offered a new licence for inter-operability information for a flat fee of £7,500 and an optional worldwide patent licence for a reduced royalty of 0.4 per cent.