The computing giant entered a legally-binding agreement with the EU in 2009 to provide a 'browser selection' screen for Windows 7 users, but failed to do so in the operating system's Service Pack 1 update.
"Microsoft has failed to roll out the browser choice screen with its Windows 7 Service Pack 1, which was released in February 2011," read a statement from the Commission.
"From February 2011 until July 2012, millions of Windows users in the EU may not have seen the choice screen. Microsoft has acknowledged that the choice screen was not displayed during that period."
Microsoft took responsibility for the shortcoming when it was brought to light and took measures to address it, introducing a browser ballot screen allowing users to choose between Internet Explorer, Mozilla Firefox, Google Chrome, Safari and Opera.
"We take this matter very seriously and moved quickly to address this problem as soon as we became aware of it," said Microsoft in a statement.
"Although this was the result of a technical error, we take responsibility for what happened, and we are strengthening our internal procedures to help ensure something like this cannot happen again.
"We sincerely apologise for this mistake and will continue to cooperate fully with the Commission."
However, should the Commission choose to penalise Microsoft for its lapse between February 2011 and July this year, the company could be fined 5.7 billion euros ($7bn) and be forced to change the way it does business in EU territories.