Microsoft has decided not to appeal the antitrust case in Europe again, after its first appeal was rejected by the European Court of First Instance (CFI) last month.

The company said it would now work with the European Commission to comply with the original ruling and make its software and products more competitive.

"At the time the Court of First Instance issued its judgment in September, Microsoft committed to taking any further steps necessary to achieve full compliance with the Commission's decision," an official Microsoft statement said.

"We have undertaken a constructive discussion with the Commission and have now agreed on those additional steps. We will not appeal the CFI's decision."

Redmond said it would now work closely with the Commission and the industry "to ensure a flourishing and competitive environment for information technology in Europe and around the world."

The case began in 1998 following a complaint to the European Union by Sun Microsystems.

As part of the deal, Microsoft will now license its intellectual property to competitors for a single €10,000 (£6,975) fee, rather than accruing royalties.

Redmond will still control its patents, but will have to license them out at the rate of 0.4 per cent product revenue, which is well below the usual 5.95 per cent fee.

Following the deal, EU Competition Commissioner Neelie Kroes has ended the €3m daily fines to which the company was subject.