"Microsoft filed on April 17 an injunction seeking the suspension of the decision, but the court rejected the request on July 4, saying it was unfounded," Seoul's antitrust agency said.

The Korean antitrust agency had ordered the world's biggest software company in December to make the separation or allow for the embedding of rival products on its system. It had also fined Microsoft 32.5 billion won ($34.5 million).

Microsoft separately filed an appeal with the Seoul High Court to review the case, for which a ruling has yet to be made.

Microsoft has said its bundled version has benefited consumers and the local technology industry and has not blocked competition because South Koreans can already download and use competitors' software.

South Korea's Fair Trade commission officials said that they planned to take active counter-measures if Microsoft appealed to the highest court against this decision.

The 2005 ruling, which resembles a 2004 European Commission decision, held that Microsoft was in breach of antitrust laws by selling a version of Windows that incorporated its media player and instant messaging services. South Korea is among the top ten markets for Microsoft globally, the company has said.

The $34 million fine is the largest imposed on a foreign firm by the commission, so far.