Antitrust experts said the verdict by the General Court, Europe's second-highest, may strengthen the Commission's hand in ongoing cases against Google, Samsung Electronics and Motorola Mobility related to their patents.

Judges at the General Court reduced Microsoft's fine by 4.3 percent to 860 million euros ($1.1 billion) from the 899 million imposed in 2008. The 2008 fine - about $1.3 billion at the time - amounted to just over 2 percent of Microsoft's revenue for the fiscal year ended June 30, 2008.

The European Commission imposed the penalty four years ago - a record at the time - after Microsoft defied an antitrust ruling issued four years previously to provide information to make business easier for its rivals.

The EU regulator said at the time Microsoft delayed implementing its order for 488 days.

"The General Court essentially upholds the Commission's decision imposing a periodic penalty payment on Microsoft for failing to allow its competitors access to interoperability information on reasonable terms," the court said in a statement on Wednesday.

But it cut the fine "to take account of the fact that the Commission had permitted Microsoft to apply, until September 17, 2007, restrictions concerning the distribution of 'open source' products".

Microsoft expressed disappointment at the verdict but did not say if it would appeal to the EU Court of Justice, Europe's highest.

"Although the General Court slightly reduced the fine, we are disappointed with the court's ruling," the company said in a statement.

The Commission welcomed the court ruling.

"The judgment confirms that the imposition of such penalty payments remains an important tool at the Commission's disposal," EU Competition Commissioner Joaquin Almunia, who enforces antitrust regulations, said in a statement.

Big companies on the Commission's radar should take note of the court ruling, said Michael Reynolds, a partner at Allen & Overy. The law firm represented Sun Microsystems, whose original complaint triggered off the EU probe.

"Dominant companies such as Google will take notice of this in the way they handle their case and how they come to a settlement," he said.

Last month, Almunia gave the world's most popular search engine until early July to settle an 18-month probe and avoid a fine that could reach up to 10 percent of its global turnover.

Reynolds said the ruling also clarifies the regulator's role regarding the setting of fair and reasonable prices, the core of the Commission's investigations into patent cases involving Google, Samsung and Huawei.

"It does make clear that the Commission is not there to make specific orders on rates, it is up to the companies to satisfy the Commission that they are not infringing the law," he said.

The Microsoft case highlighted the prickly relations between the software giant and the European Commission over the last decade.

The company has in recent years taken a more conciliatory approach, marked by a decision to settle another antitrust investigation in 2009 related to the choice of a browser in its Windows operating system.

It has also lodged its own complaints to the Commission about the business activities of Google.

(Editing by David Holmes; editing by Rex Merrifield)

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