AstraZeneca is to appeal against the ruling

The European Commission said the firm gave misleading information about when the drug was first approved, enabling the firm to extend the patent's life.

AstraZeneca said it would appeal against the decision which it claimed was "legally and factually flawed".

Losec was the best-selling prescription drug globally for much of the 1990s.

'Market abuse'

It now faces competition from cheaper, generic versions of the drug in most markets.

By preventing generic competition AstraZeneca kept Losec prices artificially high Neelie Kroes, EU Competition Commissioner

After a six-year investigation, the Commission found the company had mislead regulators in order to extend the life of its patent, protecting it from competition between 1993 and 2000.

"Healthcare systems throughout Europe rely on generic drugs to keep costs down," EU Competition Commissioner Neelie Kroes said.

"By preventing generic competition AstraZeneca kept Losec prices artificially high."

Good faith

AstraZeneca said it had acted in good faith when it sought to extend the patent and would appeal against the verdict in the EU's Court of Justice.

It said the fine did "not take into account the substantial evidence submitted by the company with regard to the use of Losec as just one of the treatments available for treatment of stomach acid disorders".

The Commission has the right to impose a fine equivalent to 10% of a company's annual sales if it is found guilty of anti-competitive actions.

Although the fine represents only a tiny fraction of AstraZeneca's $21bn (�11.5bn) sales last year, experts said it was still larger than expected.