Microsoft faces EU investigation over alleged abuse of its market position to control the desktop software and low-end server markets, and hampering competition by bundling Windows Media Player within Windows XP. It has been accused of actively misleading EU investigators.
The company denies all the accusations and has said it will respond in November.
The details emerged in a report leaked to the Wall Street Journal, which also implied that Microsoft could be fined up to 10% of its annual revenue of $2.5bn (£1.7bn), although penalties in other cases have averaged 1%. EU competition commissioner Mario Monti said speculation was premature.
The software company and the US government were given until last Friday to reach some kind of settlement deal in the US antitrust case. Their failure to do so moves the process to arbitration and, if that fails by 2 November, fresh court hearings will start on 11 March 2002.