Microsoft has decided not to challenge a European antitrust ruling against it, ending a three-year legal battle with regulators.

The European Commission said today that Microsoft has agreed to license all its intellectual property except patents to enable rivals to develop software that works with Windows for a one-time payment of 10,000 euros. Microsoft has agreed to license patents for a royalty payment of 0.4 percent of the competitor's revenue, sharply reduced from the rate of 5.95 percent claimed by the company.

"I have always said that open-source software developers must be able to take advantage of this remedy. Now they can," said Neelie Kroes, the European competition regulator.

At a news conference, she said, according to Reuters, that the agreement "is a victory for the consumer."

Microsoft had been racking up fines of 3 million euros a day for noncompliance with the European directive.

Last month, a European appeals court ruled that the European Commission was right in finding that Microsoft abused its dominant market position in software by bundling applications to its Windows operating system and by refusing to divulge information about Windows to rival developers of applications. Microsoft could have appealed the ruling to the European Court of Justice.

The European action echoed the Justice Department's antitrust case against Microsoft, which was prompted by the complaints that Microsoft was abusing its dominant position to keep the Internet browser Netscape off personal computers. That case was settled in 2001.