"We asked the [European] commission to withdraw our request for a hearing," said John Frank, Microsoft's chief legal officer in Europe. He added that it would be "inaccurate" to say that a settlement is in the offing.
Microsoft would not reveal details behind its decision to pull out of hearing, which had been scheduled for 20 December.
"We want to devote our energies toward a constructive resolution of the case," Frank said. "We have said that when the commission is ready, we would welcome the opportunity to hold discussions with them to see if a mutually agreeable solution can be found."
Microsoft is under pressure from the UK Government over changes to its software licensing regime, but Frank denied that the software giant is pulling out of the hearing because it does not want to expose the details of the case beyond the commission's investigating team.
National competition regulators and companies involved in a European Union antitrust case attend hearings.
"Everyone with access to the hearing will have access to our written submission and to the commission's statement of objections," Frank said.
Microsoft submitted a lengthy written response to the commission on 16 November, in reply to the opening of a new antitrust lawsuit at the end of August. This case merges two previous cases against the company and adds fresh allegations.
Contact between Microsoft and the European Commission since the submission of the written response has been "very limited", according to a source close to the investigation. "I would be shocked if a deal is in the works," he said.
Amelia Torres, a spokeswoman on competition matters for the commission, said the next step is to decide whether or not there should be a hearing. "The right to a hearing applies both to the defending parties and the complainants," she said.
It is possible that a third party might request a hearing, said the source close to the investigation. "They will have to decide whether to do that or to continue with the written responses," he said.
Sun Microsystems is the main complainant, but many other companies have filed their opinions about Microsoft's impact on competition in Europe.
In its statement on 30 August, the commission accused the company of "illegal practices to extend its dominant position in the market for personal computer operating systems into the market for low-end server operating systems".
The fresh allegations concern Media Player, the software embedded in Windows that allows users to play sound and video on their PCs. The Commission alleges that Microsoft is illegally tying its Media Player product to the Windows operating system, to the detriment of competing software.
However, the case centres on one central issue: interoperability. "The Commission believes that Microsoft may have withheld from vendors of alternative server software key interoperability information that they need to enable their products to 'talk' with Microsoft's dominant PC and server software products," the Commission said.
The Commission believes that Microsoft may have done this through a combination of its refusal to reveal the relevant technical information and by "engaging in a policy of discriminatory and selective disclosure on the basis of a 'friend-enemy' scheme".
Microsoft replied to the commission's statement on the same day, saying that it is "gratified that the commission appears to have narrowed the types of technical information that it believes that Microsoft should disclose to competitors".
The company reiterated that it is committed to ensuring that its products are interoperable with others on the market, and said it "welcomes the opportunity to continue discussions with the Commission on concrete steps that will promote interoperability solutions that meet the needs of computer users".