EU competition commissioner Neelie Kroes has "warned Microsoft that they have until the end of the month to tell us definitively what measures they will take to comply" with the ruling, her spokesman Jonathan Todd said.

"If it is not satisfied, the commission will activate procedures for imposing daily fines" on the group, he added.

In March 2004, the commission, which polices antitrust issues in the European Union, fined the software group a record 497 million euros ($623 million) for abusing its dominant market

position.

The commission also called on Microsoft to market a version of its leading operating system Windows without bundling it to its software Media Player and required the company to divulge information about its product operating system needed by manufacturers of competing products.

Commission "unsatisfied"

The commission has also called for an independent "monitoring trustee" to be named to make sure that Microsoft applies the ruling correctly.

Despite "regular contacts" between Brussels and the group, Todd said the commission was unsatisfied on all of its demands.

Under EU rules, a company that fails to comply with a commission competition ruling could in theory be fined up to five percent of its daily global turnover per day for each day the ruling is not respected.

The commission has never before inflicted such harsh punishment on a company that did not bow to its will.

Playing down its defiance, a Microsoft spokesman in Brussels said: "We continue to work out with the commission towards an agreement on full compliance with the decision."