Microsoft has been given until 1 June to comply with an anti-trust judgement from the European Union or face a $5m (£2.7m) a day fine.
The EU said that if Microsoft did not comply by this date with the sanctions imposed last year it would consider initiating legal proceedings to fine the company each day up to 5% of its daily sales, equating to $5m.
Following the EU’s judgement last year that Microsoft abused its market position, the company has already paid out a €497m (£345m) fine.
Microsoft had failed to fully address the major remedies in the judgement, the EU said.
The software company has failed to come up with a plan acceptable to the EU to make its workgroup server protocols available to competitors, which would let rivals more easily develop solutions for the Windows environment.
Nor has Microsoft so far managed to launch a European version of Windows without Windows Media Player bundled - an EU stipulation designed to fully open up the media player market.