BRUSSELS, Belgium - The European Union declared Microsoft Corp. guilty of abusing its "near monopoly" with Windows to squeeze competitors in other markets, and today hit the software giant with a record fine of 497.2 million euros, or $613 million.

The EU's antitrust authority said that "because the illegal behavior is still ongoing," it was also demanding changes in the way Microsoft operates.

It gave Microsoft 90 days to offer computer manufacturers a version of Windows without the company's digital media player, which lets computer users watch videos and listen to music and is expected to be an important market as such Internet content becomes even more pervasive in coming years.

Microsoft also has 120 days to release a "complete and accurate" programming code to rivals in the server market, so their products can work just as well with desktop computers running Windows.

"Dominant companies have a special responsibility to ensure that the way they do business doesn't prevent competition ... and does not harm consumers and innovation," EU Competition Commissioner Mario Monti said.

"Today's decision restores the conditions for fair competition in the markets concerned and establishes clear principles for the future conduct of a company with such a strong dominant position."

Settlement talks with Microsoft broke down last week over the EU's insistence that a deal include ground rules that would apply to future versions of Windows. The commission is already investigating a complaint filed by competitors against the latest version, Windows XP.

"Microsoft believes a settlement would have been better for European consumers," Microsoft spokesman Tom Brookes said in Brussels. Microsoft's general counsel, Brad Smith, planned to comment later today.

The company has said it would appeal and has just over two months to do so. It is also expected to ask the EU's Court of First Instance to suspend the order during the appeal, which could take years.

The order goes beyond the 2001 U.S. settlement on similar antitrust charges and aims at the heart of Microsoft's business strategy of regularly adding new features to Windows to help sell upgrades.

The Redmond, Wash.-based company argues such "bundling" benefits consumers. But rivals call it unfair, given that Windows runs 90 percent of personal computers worldwide.

The EU regulators were concerned that such bundling "deters innovation and reduces consumer choice in any technologies which Microsoft could conceivably take an interest in and tie with Windows in the future."

Microsoft was found guilty of similar monopolistic behavior in the U.S. case, but the settlement reached with the Bush administration allowed it to continue adding to Windows. A U.S. appeals court is considering whether that landmark deal was adequate.