The European Union has slapped Microsoft with a record setting $613 million fine over allegations the software developer has illegally used its Windows monopoly to stifle competition.

Horacio Gutierrez, Microsoft chief European legal counsel, said: "We believe it's unprecedented and inappropriate for the Commission to impose a fine on a company's US operations when those operations are already regulated by the US government and the conduct at issue has been permitted by the Department of Justice and a US court."

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