The European Commission ordered the software giant to offer a version of its Windows operating system without Windows Media Player within 90 days.
It also ordered Microsoft to disclose enough material to rival makers of work group servers so their products have full interoperability with Windows personal computers and servers.
Microsoft has 120 days to fulfil this condition. Todays decision restores the conditions for fair competition in the market concerned and establishes clear principles for the future conduct of a company with such a strong dominant position, competition commissioner Mario Monti said in a statement.
Microsoft has just over two months to file its promised appeal. It also is expected to ask the EUs court of first instance to suspend the order during the appeal process, which could take years.
The order goes beyond the 2001 US settlement on similar antitrust charges and aims at the heart of Microsofts business strategy of regularly adding new features to Windows to help sell upgrades.