The European Commission has threatened to fine Microsoft up to 2m euros (£1.36m; $2.4m) a day until it gives rivals more access to its systems.
Brussels said the software giant had failed to supply adequate information about its server programs.
Microsoft has five weeks to provide improved documentation before the daily penalties are imposed.
But the company pledged to contest the EU’s “unjustified” demands by whatever means possible.
“We will contest today’s statement to the full extent permitted under EU law, including a full oral hearing on these issues,” Microsoft legal chief Brad Smith said in a statement.
He added that the firm had done its utmost to comply with the EU’s demands, but Brussels kept changing the goalposts.
“We’ve shipped a new version of Windows, we’ve paid a historic fine, and we’ve provided unprecedented access to Microsoft technology to promote interoperability with other industry players,” Mr Smith added.
“In total, we have now responded to more than 100 requests from the Commission.”
In a landmark ruling in March 2004, the world’s biggest software firm was found guilty of abusing its position, hit with a record fine and told to open up its operating systems.
Microsoft was also ordered “to disclose complete and accurate interface documentation which would allow non-Microsoft work group servers to achieve full interoperability with Windows PCs and servers”.
The EU’s second highest court – the Court of First Instance – later rejected an appeal by Microsoft and warned it to comply with the order by 15 December 2005, or face a daily fine.
But following two reports from a monitoring trust that has been checking information supplied by Microsoft, the European Commission says the software giant has failed to provide all the necessary detail.
It quoted the reports as saying the technical documentation was “totally unfit at this stage for its intended purpose”.
In September this year, Microsoft launched a second appeal against the March 2004 ruling – which included a 497m euro fine – in an effort to avoid giving more information on its server programs.
The firm argues that doing so would violate intellectual property rights.
“I have given Microsoft every opportunity to comply with its obligations,” EU Competition Commissioner Neelie Kroes said in a statement as the five-week deadline was issued.
“However, I have been left with no alternative other than to proceed via the formal route to ensure Microsoft’s compliance.”
The EU also warned that if Microsoft failed to provide the necessary information by 25 January, the daily fines would be backdated to 15 December 2005.