News reports indicate that Microsoft wants to settle its long-running EU anti-trust case by proposing that rivals' products are included on CD-ROMs supplied with personal computers.
The report says that the European Commission's response is that the proposal by the US software giant doesn't go far enough.
Rivals of Microsoft are also suspicious of the offer, and say that too few consumers use software provided on such CD-ROMs.
Microsoft, which has largely settled its anti-trust problems in the United States, is accused in Europe of trying to squash rival products to its Windows Media Player, such as RealPlayer and Apple QuickTime.
The software giant has also been accused of trying to squeeze out other firms in the market for "low-end servers" - computers that provide e-mail and other services to multiple users.
Last August, the European Commission called for Microsoft to separate Media Player from the Windows operating system or else include rival products in Windows.
There has been no comment from the commission regarding the report.
The results of a draft report from Brussels into this investigation are due to be published in the coming months.