Microsoft and the European Commission will resolve their differences before the end of May over the remedies imposed on the software giant for violating antitrust laws, the European Union's competition chief said Monday.

"We made a deal that before the end of the month we would reach an agreement. We are waiting for the Microsoft people to do their homework," European Competition Commissioner Neelie Kroes said.

Asked whether she would open a new process against Microsoft if it failed to act, Kroes said: "It is too premature to say that." The Commission could fine Microsoft up to $5 million daily for failure to comply with sanctions imposed on it.

The Commission, which polices competition in the 25-nation European Union, fined the U.S. software giant a record 497 million euros ($624 million) on March 24, 2004, and ordered it to change the way it does business.

"We continue to work hard with the Commission to reach an agreement on full compliance with the decision," a Microsoft representative in Brussels said when told of Kroes' remarks.

That decision requires Microsoft to make its ubiquitous Windows operating system available without Windows Media Player, so computer makers can buy alternative software, to play films and music, from RealNetworks or Apple Computer.

It also ordered the company to share information with rival makers of servers used to run printers and retrieve files, an issue known as interoperability. The company was supposed to propose a trustee to monitor its compliance.

If the deal with Kroes falls through, the Commission could decide that Microsoft has taken enough time to comply with the decision and open a new procedure against the company to fine it for noncompliance.

That would require a formal statement of objections, an advisory committee of EU states, and, finally, a decision by the full 25-member European Commission.

But such a procedure could move very quickly because there is very little that needs proving--Microsoft so far has not met requirements that it comply with the remedies to the satisfaction of the Commission.

If the Commission moves quickly, it could complete work before its summer recess at the end of July.