Feb. 25 (Bloomberg) -- European Union regulators may fine Microsoft Corp. for failing to comply with a 2004 antitrust order to charge ``reasonable'' fees for patent licenses on operating system software, three people familiar with the matter said.

The fine may be announced as soon as Feb. 27, said the people, who declined to be identified because the decision isn't public. Microsoft said in a Jan. 24 U.S. regulatory filing that the penalty may be as much as 1.5 billion euros ($2.2 billion).

Microsoft has tried to allay European antitrust concerns, announcing last week that it will help competitors' software work better with some products, such as Office. It also sought to limit potential EU fines, which already total 775 million euros in the 2004 case, by agreeing in October to make network data available to open-source software developers so their server software can connect to Windows.

``This will have a headline effect for investors,'' said analyst Charles Di Bona at Sanford C. Bernstein & Co., who has an ``outperform'' rating on Microsoft shares. ``If it's a reasonable fine, you deal with it and you move on. If it's not, they'll appeal.''

Tom Brookes, a Microsoft spokesman in Brussels, and Jonathan Todd, a spokesman for the European Commission, the EU's antitrust regulator in Brussels, declined to comment.

The EU's penalty isn't related to Microsoft's announcement last week on easing compatibility problems with rivals' products. The commission's fine is based entirely on the company's non- compliance with the 2004 antitrust order.

Backdated Fines

On March 1, 2007, the EU threatened the company with millions of euros in daily fines backdated to December 2005 for failing to fully comply with a March 2004 antitrust order.

Under that decision, for which the company was fined a record 497 million euros, Microsoft had to provide data to rivals to allow their servers to connect to the Windows platform. When patent licenses were necessary for that network data, Microsoft was required to charge ``reasonable'' royalties.

Microsoft rose 16 cents to $27.84 at 4 p.m. New York time in Nasdaq Stock Market trading.

Last month, EU regulators opened investigations into whether Microsoft is using its dominance in word processing and spreadsheets to thwart rivals and whether the company illegally tied an Internet browser to its Windows operating system. The latest penalty isn't related to the two new probes against the Redmond, Washington-based company.

In July 2006, the EU also imposed a 280.5 million-euro penalty on the software company for failing to license information to rivals on how Windows communicates over a network. It was the first time that the EU had fined a company for failing to comply with an antitrust order.

The maximum 1.5 billion-euro fine cited in Microsoft's Jan. 24 U.S. Securities and Exchange Commission filing is based on commission calculations for a possible penalty. The commission has the option of fining Microsoft a smaller amount.

To contact the reporter on this story: Matthew Newman in Brussels at Mnewman6@bloomberg.net.

Last Updated: February 25, 2008 16:08 EST