BRUSSELS - Microsoft yesterday stepped up its marathon legal battle with the European competition authorities, lodging a formal appeal against a US280.5 million ($426 million) fine imposed on it for failing to obey an earlier ruling.

The legal challenge is the latest step in an increasingly acrimonious clash which has become a test of the European Commission's determination to stand up to the US software giant.

The appeal has its origins in a ruling from the EC in 2004 when it fined the US firm a record US$497 million for abusing its dominant position. Microsoft appealed, with a ruling expected by early 2007.