The European Court of First Instance upheld the fines in a decision handed down last month. At the time, Microsoft hinted that it might appeal the ruling to Europe's highest court. On Monday, however, the company said it won't challenge the verdict.
"We will not appeal the CFI's decision to the European Court of Justice," Microsoft said in a statement.
The EU's European Commission originally fined Microsoft $613 million in 2004 following a five-year investigation sparked by a complaint from Sun Microsystems.
The commission cited anticompetitive behavior that included Microsoft's bundling of Windows Media Player with the Windows operating system and overcharging its rivals for the technical documentation needed to make their products interoperate with Microsoft Windows.
The EU added $357 million to the fine last year after claiming the software maker hadn't sufficiently modified its behavior.
Microsoft's announcement that it won't appeal the fines came shortly after European Competition Commissioner Neelie Kroes said the company is now in full compliance with conditions she imposed after the 2004 finding.
Kroes said Microsoft has agreed to make interoperability information available to open-source developers for a one-time payment of 10,000 euros (about $14,000 U.S.). Microsoft also dropped its previous demand that developers licensing such information also pay hefty sums to license related patents as well. For developers that choose to license the patents (it's now optional), Microsoft has reduced royalty fees from 5.95% to 0.4%.
"The measures that the commission has insisted upon will benefit computer users by bringing competition back to the server market," Kroes said in a statement Monday.
Microsoft's decision not to appeal the fines and to accept the market conditions imposed on it would appear to signal a desire to improve relations with European authorities.
The company will "continue to work closely with the (European) Commission and the industry to ensure a flourishing and competitive environment for information technology in Europe and around the world," Microsoft officials said.