EU regulators will charge Microsoft for failing to comply with a 2009 ruling ordering it to offer users a choice of Web browsers.
"The next step is to open a formal proceeding into the company's breach of an agreement. We are working on this," EU Competition Commissioner Joaquin Almunia told reporters.
"It should not be a long investigation because the company itself explicitly recognized its breach of the agreement."
The European Commission opened an investigation into the case in July, the first time a company is alleged to have failed to meet its commitments under EU antitrust decisions.
If found guilty, Microsoft could face fines up to 10 per cent of its global turnover.
Microsoft agreed nearly three years ago to allow European consumers better access to rival browsers in its Windows software, settling an antitrust case and avoiding a penalty which could have been set at up to 10 per cent of turnover.
The company, which had acknowledged not offering users a choice of browsers in its Windows 7 operating system from February 2011, has been fined more than 1 billion euros by the Commission in the last decade for breaching EU rules.
Almunia also warned Google of a lengthy legal process ahead if it does not do more to soothe concerns that it may have undermined competitors.
"If remedies offered by Google can eliminate our concerns, we will succeed in reaching an agreement. Otherwise, the legal road is a long one," he said on the sidelines of a forum on competition in the Polish capital.
Google is in talks with the Commission to resolve concerns about its business practices, following complaints from Microsoft and other rivals.