European regulators have fined Microsoft about $730 million for failing to honor an agreement to give users a choice of Internet browser.
Microsoft shares fell 0.7% in pre-market trading, as Nasdaq futures moved 0.3% higher. Wednesday's fine could have been significantly larger. The EU has the power to impose fines of up to 10% of annual revenue, or about $7 billion in Microsoft's case.
Under the pledge, dating back to 2009, PC users setting up Windows for the first time were supposed to see a "choice screen" offering 11 different browsers, including Microsoft's own Internet Explorer. The prompt disappeared following an update to the Windows 7 operating system in February 2011, depriving 15 million users of a choice.
Microsoft has apologized for what it described as a "technical error," which lasted 14 months to July 2012. The company said it fixed the problem as soon as it was made aware of the error.
"We provided the commission with a complete and candid assessment of the situation, and we have taken steps to strengthen our software development and other processes to help avoid this mistake -- or anything similar -- in the future," the company said Wednesday.
The U.S. company has a long history of legal battles with the EU. In the last 10 years alone Microsoft has been fined over 1.6 billion euros for abusing its dominant position in the market for PC software.
Microsoft faced similar antitrust lawsuits in the United States in the 1990s and early 2000s over its tactic of using its dominant position with Windows to promote its Internet Explorer browser over rivals like the now-defunct Netscape Navigator.