The European Commission's competition talks with Microsoft have collapsed, said European competition commissioner Mario Monti.
Monti said that despite strenuous efforts by Microsoft to meet the European Commission's concerns, a settlement of the case "has not been possible".
"Therefore we will propose next Wednesday that the commission adopts a decision," the competition commissioner said.
Monti added that a precedent setting legal ruling is in the best interest of consumers and competition.
"We made substantial progress towards resolving the problems but were unable to agree on commitments [Microsoft must make] for future conduct," Monti said.
"The public and competition would therefore, be better served by a decision setting a strong legal precedent, which establishes clear principles for a company that is so dominate in the market."
Any ruling against Microsoft will not badly affect the software giant's business and Windows users will not have to take any action, according to analyst firm Gartner.
Although the move has been brought about by concerns over competition, Gartner analyst David Mitchell-Smith said it would be business as usual at Microsoft.
"Even if the ruling does stand and the proposed fine and remedies are imposed, Microsoft's business won't be badly affected," he said. "The fine is in line with Gartner's earlier predictions, and Microsoft has already budgeted for it. Having to ship two versions of Windows would have little market impact - as long as both versions have the same price, which we would expect to be the case."
Monti added that setting a strong precedent is "of key importance". By setting a legal precedent in the existing antitrust case against Microsoft, the commission will make it easier to pursue Microsoft in future antitrust cases.
The commission is already examining a complaint by Microsoft rivals that the latest version of the Microsoft operating system, Windows XP, is abusing its dominance in the market.
"Other cases [against Microsoft] that exist or are on the horizon [and they bear] remarkable similarities to issues raised in the existing antitrust case due to conclude next Wednesday," Monti said.
Other issues the commission is investigating is how Microsoft sells its music and video playing software program Media Player and the company's practice of bundling the program with its Windows operating system.
The commission is expected to require that the company sell two versions of Windows to PC manufacturers: one with Media Player and one with the program stripped out.
The commission also wants to force Microsoft to share enough secret Windows code with rivals so that they can design server software that works as smoothly with the Windows operating system as Microsoft's own server software.
Carly Suppa writes for ITWorldCanada.com