Microsoft has admitted it may have failed to install a choice of browsers other than its own on 28 million computers and could now face the prospect of huge fines for what it describes as a "technical" error.
The revelation by the US software giant is the second time it has defied regulators.
Microsoft agreed to provide a choice of access to different browsers to its customers – a deal set in place by a 2009 European Union order – and closely avoided a penalty fine at the time. The 2009 agreement was made to enable other browsers – such as Google and Mozilla – to be available instead of only its own, Internet Explorer, browser.
Microsoft admitted it has "fallen short" of the agreement while EU Competition Commissioner Joaquin Almunia said investigations of its Windows 7 operating system have found that 28 million users were not offered a choice.
"If following our investigation, the infringement is confirmed, Microsoft should expect sanctions," he said.
But Microsoft has blamed the error on a "technical problem" and has vowed to rectify this.
The company said: "Due to a technical error, we missed delivering the BCS (browser choice screen) software to PCs that came with the service pack 1 update to Windows 7. While we have taken immediate steps to remedy this problem, we deeply regret that this error occurred and we apologise for it."
The 2009 ruling followed a 10-year battle between the EU and Microsoft with regulators accusing the company of abusing its dominance.