US software colossus Microsoft lost its first-stage appeal against the draconian antitrust sanctions imposed in March by the European Commission. The verdict was delivered Wednesday by Judge Bo Vesterdorf, president of the European Court of First Instance.

MS had petitioned the court to suspend the sanctions until its fullscale appeal is decided - likely to be two or three years hence. Judge Vesterdorf, however, upheld immediate restoration of the sanctions pending a final decision. Microsoft had failed to show that the sanctions would cause it "serious and irreparable damage", he said.

The case revolves around the flagship Windows operating system. The latest ruling in the long-running legal saga will impede Microsoft from adding new functions and programs - dubbed 'bloatware' by technoheads.

In March 2004 MS was fined a record €497m ($665.48m; £347.97m) and ordered to reform its business practices - for example it must offer consumers and PC manufacturers a cheaper version of Windows shorn of such nonessentials as the MediaPlayer software.

The EC also requires MS to license information to rivals making it easier for them to design servers able to interface with Windows-driven PCs.

The Commission hailed the judge's decision as "important because it preserves the effectiveness of antitrust enforcement, in particular in fast-moving markets as in this case". The ruling would not only "benefit consumers of computer products but also stimulate innovation".

Microsoft too was surprisingly upbeat, albeit regretful that the judge had not imposed a stay on the sanctions. It declared itself "encouraged by a number of aspects of the Court's discussion on the merits of the case", although it failed to identify these aspects.

The matter of an appeal to a higher court had yet to be decided, said the software leviathan.

Data sourced from Financial Times Online; additional content by WARC staff