Microsoft has been given a week to reach an agreement with the European Commission on anti-trust sanctions or face a $5 million-a-day fine. European competition commissioner Neelie Kroes gave the end-of-May deadline yesterday.

If Microsoft does not reach an agreement with the regulator by 1 June, the Commission will decide whether it wants to initiate proceedings to impose a daily fine for non-compliance. The Commission can fine up to five percent of a company's daily sales, which for Microsoft equates to $5 million.

Microsoft is working hard to reach an agreement with the Commission and is aware of the timeline, a spokesman confirmed.

The Commission ruled last March that Microsoft had abused its dominance in the PC operating systems market to gain an edge in related markets. It fined the software maker 497 million euros and ordered it to sell a version of Windows in Europe without Windows Media Player (WMP). It also ruled that the company had to give competitors access to information that would allow them to make their workgroup server products run smoothly with Windows-based PCs.

Microsoft has paid the fine, but details of the other two remedies have been under negotiations. The Commission has already fallen out with the software maker over its plans to call the WMP-free version of Windows, "Windows XP Reduced Media Edition."
The regulator said the name was unattractive to consumers and Microsoft eventually agreed to call it "Windows XP N".

Licensing terms for the workgroup server protocols have also been a sticking point and need to be resolved before the two sides can move forward.

If the Commission decides it wants to impose a fine for non-compliance, the process could take weeks to implement. Asked if Microsoft is prepared to pay the fine, a spokesman said it was too early to speculate.