[mkjan]

Microsoft today raised the stakes again in its long-running legal battle with the European commission by lodging an appeal against the record €899m (£710) fine imposed on it earlier this year.

The world's biggest software group said it had filed to the court of first instance, Europe's second-highest court, an application to annul the EC's decision of February 27.

"We are filing this appeal in a constructive effort to seek clarity from the court," it said, presaging a prolonged legal battle on top of the nine years of dispute with Brussels. But the commission insisted that the fine was "legally sound".

Neelie Kroes, EU competition commissioner, imposed the fine because of Microsoft's non-compliance with earlier anti-trust rulings and for charging excessive royalty fees for rivals seeking inter-operability information for its systems with the dominant Windows operating system. This commands 95% of the global market.

Today's decision to appeal is surprising as the group had indicated earlier this year a wish to make a fresh start in its often acrimonious relations with the commission - with which it is a partner in several IT projects.

But competition lawyers at Norton Rose said the group had clearly decided it has nothing to lose and everything to gain in trying to overturn - or significantly reduce - the record fine. "The battle continues," they said.

The commission fined Microsoft a then record €497m in March 2004 for abuse of dominance, including tying its MediaPlayer audio-visual software to Windows - a decision upheld by the CFI in September last year. The commission later imposed a €280.5m penalty for non-compliance.

So far Brussels has fined it a total of €1.68bn. The group took a third-quarter charge of $1.42bn (£730m) last month to take account of the latest fine, depressing its operating earnings to $4.4bn but said it expects earnings in the current quarter to be closer to $6bn. Brussels insiders often say the fines are a drop in the ocean for the group.