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The fine was imposed on Microsoft by the European Commission following its failure to comply with the March 2004 Decision, requiring the software giant to publish the details of the interfaces to Windows Server 2003 that would allow rival software companies to develop applications on the same basis as Microsoft's own teams.

The appeal is the latest step in an increasingly bitter dispute between the Commission and Microsoft. At the time the fine was imposed, Microsoft's General Counsel Brad Smith said 'We do not believe any fine, let alone a fine of this magnitude, is appropriate given the lack of clarity in the Commission's original decision and our good-faith efforts over the past two years.' He concluded: 'The fine is larger than the fines the Commission has imposed for even the most severe competition law infringements, such as price-fixing cartels.'

In the end Microsoft did deliver the documentation to the Commission - at the last possible moment.

For her part, Competition Commissioner Neelie Kroes said: 'Having carefully weighed all of the evidence, only one conclusion was possible. From 16 December last year to 20 June of this year: Microsoft did not even come close to providing complete and accurate specifications. Microsoft therefore remained in breach of the Commission Decision and the Commission had no option but to impose a penalty payment on Microsoft.'

The Commission has also warned Microsoft that it would be examining Vista for any further evidence of monopolistic practices, such as the features that would lock out rival security firms.

Microsoft has warned that any attempt to interfere with the Vista feature set may result in a delay in the operating system's introduction in Europe risking thousands of jobs.

In another twist, Frenchman Henri Piffaut, who was to have taken over the antitrust unit at the European Union executive handling the Microsoft case, has taken a one year leave of absence to work for an economic consultancy LECG who just happens to have Microsoft as a client. Apparently, Piffaut has said he will not work on competition cases that have come before the Commission.