Microsoft's efforts to comply with the European Commission's anti-competition ruling are "entirely inadequate", Brussels has warned.
Microsoft says it is doing all it can to meet the EC's demands
The Commission said it would impose fines of up to 2m euros (£1.4m) a day if the firm continued to drag its feet.
The comments followed reviews of how the US giant was meeting EC demands that it open up its Windows operating systems to rivals.
Microsoft rejected the claims saying it had "surpassed" the EC's requirements.
The US giant's troubles go back to March 2004, when it was fined 497m euros for abusing its dominant market position in a landmark EC ruling.
But more importantly it was also ordered to open up its core software systems to rivals making it easier for them to build products which would work with Windows.
However, Brussels is still pressing the firm for more detailed information about its systems and claims the software giant is failing to meet its demands.
"Microsoft is still not in compliance with its obligations under the March 2004 Commission decision," the Commission said after the latest reviews of its performance.
The reports, by the Commission's Monitoring Trustee and Colorado consultant TAEUS, found that parts of the latest documentation provided by Microsoft were "entirely inadequate, devoted to obsolete functionality and self-contradictory", the Commission said.
"TAEUS concludes that Microsoft's documentation was written 'primarily to maximize volume while minimising useful information'," it added in a statement.
But Microsoft rejected the findings, saying the information it had offered "meets and surpasses the requirements of the Commissions 2004 decision".
Microsoft has challenged the ruling, and a hearing on its underlying case is due to be heard on 24 April at the European Court of First Instance, Europe's second highest court.