Microsoft has been fined 561m euros (£484m) by the European Commission for breaking its promise to offer a choice of rival internet browsers.
The EU said that in 2009 Microsoft agreed to make a choice of browsers available to its Windows users in Europe following an anti-trust battle.
But during the roll-out of Windows 7 between May 2011 and July last year the company failed to do so in what the Commission called a "very serious infringement" of its commitment.
Over the period, around 15 million Windows users did not see the so-called browser choice screen which enables users to select their preferred search engine, the EU said.
The Commission vice president in charge of competition policy, Joaquin Almunia, said: "Legally binding commitments reached in antitrust decisions play a very important role in our enforcement policy because they allow for rapid solutions to competition problems.
"A failure to comply is a very serious infringement that must be sanctioned accordingly."
In a statement, Microsoft said it took full responsibility for the "technical error" that caused the lapse.
"We provided the Commission with a complete and candid assessment of the situation, and we have taken steps to strengthen our software development and other processes to help avoid this mistake – or anything similar – in the future," it said.
The fine - which is the first sanction against a company for failing to satisfy a previous EU complaint - will serve as a warning to other technology firms involved in European anti-trust disputes.
Google, for example, is currently in discussions with the EU over how it ranks search engine results.
Microsoft's penalty is the latest in a string of punishments issued by the Commission against the US software giant.
In total, it has been fined 2.16bn euros (£1.87bn) for - among other things - not providing data at fair prices to rivals and for tying its media player to its operating system.
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