Microsoft claims an €899 million (£783.4m) antitrust fine imposed by EU regulators was excessive and "most undeserved".
The fine was "most undeserved," Microsoft lawyer Jean Francois Bellis told the European General Court.
"This case would not have arisen if the Commission had been as explicit with respect to rates which it wanted Microsoft to charge as it had been with all other terms of licensing proposed by Microsoft," he said.
The Commission argued that Microsoft's actions after a 2007 court ruling showed that it was able to identify within a short time the measures needed to comply with its order.
A settlement was reached in 2009 when Microsoft agreed to let users of its Windows operating system to choose their own browser.
Rival Google has adopted a similar conciliatory tone in handling an EU regulatory probe of its web search practices.
The Microsoft appeal hearing will be watched by companies challenging regulatory fines, among them Intel, which has appealed in EU courts against a €1.06bn penalty imposed by the Commission last year.
Microsoft's non-compliance penalty was nearly double the original €497m fine the Commission imposed on the firm in 2004 for abusing its dominant position to thwart competitors.
Microsoft was supported in the case by the Computing Technology Industry Association and the Association for Competitive Technology.
IBM, Oracle, Red Hat, information technology lobby group ECIS, the Free Software Foundation Europe, the Software & Information Industry Association and software organization Samba supported the Commission's position.