The move would force Microsoft to change the way it distributes its Media Player software.
In its strongest statement yet in its four-year antitrust probe against the world's largest software company, the EU also said it could order Microsoft to open up the code for its computer server software to outside firms.
An EU spokesman in Brussels said the Commission felt it had a strong case against Microsoft and the amount of the fine would be linked to the severity and duration of Microsoft's perceived offence.
"At this stage, we have so much evidence and we are in possession of such substantive a file that we believe any decision we take will withstand scrutiny of the European court," Commission spokesman Tilman Lueder told a briefing.
It accused Microsoft of leveraging its dominant position in media players, the software that plays movies and video on computers, and low-end servers which manage everything from Web sites to email systems.
The EU executive said it was giving Microsoft a final chance to comment before it orders it to share crucial server software codes with competitors such as Sun Microsystems Inc. and Oracle Corp. and forces changes in the way it offers its media player, to the likely benefit of Real Networks and Apple.
The Commission said Microsoft would have two alternatives to facilitate fairer competition in media players, which run music and video on computers.
|"We have so much evidence and we are in possession of such substantive a file that we believe any decision we take will withstand scrutiny of the European court." |
-- European Commission spokesman Tilman Lueder
It could either untie Windows Media Player from its ubiquitous Windows operating system by being required to offer a version of Windows without Media Player, or it could agree to include competing media players with Windows.
"Both solutions seek to ensure that consumers have a fair choice as regards media players," the Commission said.
EU Competition Commissioner Mario Monti said the Commission had sent Microsoft a final "statement of objections, which includes the identification of appropriate remedies" to give it a final opportunity to comment before it concludes its three-year antitrust probe.
The statement gives the company another opportunity to seek an oral hearing and reply in writing.
"We are determined to ensure that the final outcome of this case is to the benefit of innovation and consumers alike," Monti said in a statement.