On Monday morning the EU's second-highest court, the Court of First Instance had rejected a Microsoft appeal against a 2004 decision issued by the European Commission (EC).

Three years ago, in 2004, the European Union decided that Microsoft clearly had abused its market dominance by refusing to publish “interoperability” protocols and when it selling its Windows operating system with Windows Media Player included.

According to EU’s ruling “interoperability” protocols would have allowed servers made by rivals to work effectively with Windows.

In fact the EC’s investigation was launched in 2000, after in 1998 Sun Microsystems had filed a complaint with EC regarding Microsoft's refusal to provide "interoperability" information.

In March 2004 the European Commission fined the company 497 million euros (689 million dollars) and ordered to US software giant to publish its inter-operability protocols. Also, under the EC’s ruling Microsoft was forced to offer a version of Windows without the media player. The EC said that by selling its operating system with a media player included Microsoft is trying to force other producers like Real Networks' Real Player out of the market. The EC called for an independent trustee to oversee compliance.

Two months later in June Microsoft appeals the EC decision to the European Court of First Instance (CFI).

But last year the EC fined Microsoft a further 280.5 million euros for its failure to publish the requested “inter-operability” protocols and threatened to raise the fine if necessary.

On Monday the President of the European Court of First Instance. Bo Vesterdorf said that the court is rejecting the EC's call for a trustee as having no basis in EU law, but the court decided that the EC’s decision was right and rejected Microsoft’s appeal.

The EU officials have welcomed the ruling. "This judgment confirms the objectivity and the credibility of the Commission's competition policy. This policy protects the European consumer interest and ensures fair competition between businesses in the Internal Market," said Jose Manuel Barroso, the European Commission president.

Also the EU Competition Commissioner Neelie Kroes considered that thanks to CFI’s ruling the software market is now open. "The court has confirmed that Microsoft can no longer prevent the market from functioning properly and that computer users are therefore entitled to benefit from choice, more innovative products and more competitive prices," Kroes said in a press conference in Brussels.

Kroes also said that as a result of the ruling Microsoft's market share in the computer operating-systems market would fall from its current 95 per cent.

In a press statement issued after the ruling was made public, Microsoft's top lawyer, Brad Smith, said that Microsoft would comply fully with a European Commission anti-trust ruling of 2004

"The first and most important question for us... is what we are doing and will do to ensure that we comply. We're 100 per cent committed to complying with every aspect of the EC's decision," Smith said in Brussels.

"The decision is not what we would have hoped for... but it does provide us some new clarity, and on that clarity I hope we can start to build a new and stronger relationship with the EC," Smith added.

The Microsoft’s top lawyer said it remains to be seen if Microsoft will appeal the decision. "We have not made that determination... We have plenty of time for that kind of thinking," he said.