Microsoft may yet win over Yahoo. Brussels, however, is another story

European regulators have fined the software behemoth 899 million euros, or $1.4 billion, for failing to comply with a 2004 antitrust decree. It is the largest fine ever imposed by the European Union against a single company.

Microsoft has now been fined a total of $2.5 billion in Europe.

"Microsoft was the first company in 50 years of E.U. competition policy that the commission has had to fine for failure to comply with an antitrust decision," said Neelie Kroes, the European competition commissioner. "I hope that today's decision closes a dark chapter in Microsoft's record of noncompliance."

While the fine is breathtakingly large, it is for practices that have since been changed. In October, Microsoft settled with European regulators, agreeing to license all its intellectual property except patents to enable rivals to develop software that works with Windows, for a low royalty payment.

The decision today is a finding by the European Commission that the royalties paid after the 2004 antitrust decree and before October 2007 "were unreasonable."

When Kroes, a former Dutch politician, became Europe's chief antitrust regulator, there was some concern that she would be more pro-business than her predecessor, Mario Monti, because she sat on a number of corporate boards. That has proved to be clearly not the case, as detailed in a profile by Charles Forelle of the Wall Street Journal on Monday.

The new game of hardball being played by European regulators comes as they have started two new investigations into whether Microsoft abused its dominance in software to help its Office and Web-browser products.

Last week, Microsoft announced with much fanfare that says that it would disclose more information about its software to enable rival products to work more smoothly on its operating system.

That announcement, which was met coolly by European regulators, may be an attempt to repair some of the damage in Europe. Or it might be part of an effort to cast Microsoft in a new, more internet-friendly light as it pursues a not-very-friendly takeover of Yahoo.

Trying to repackage Microsoft as a company that is more open and less hostile to open source is difficult when European regulators continue to hammer monopolist charges against the company.

Perhaps it is time for Microsoft to consider abandoning Europe? Tempting as that might be for the company's busy lawyers in Brussels, Europe is the source of roughly a quarter of the company's more than $50 billion in annual revenue.