Almunia has advocated negotiated settlements since he took office in 2010, saying competition issues are best resolved quickly. He says slapping big fines on companies years after the fact does little to help consumers.
But he said the whole point of a settlement is undermined when companies then don't abide by its terms.
"They must do what they committed to do, or face the consequences," he said.
Almunia conceded that the Commission had been "naive" in appointing Microsoft itself to oversee compliance with the agreement, and said the Commission won't allow that in the future.
For its part, Microsoft was apologetic.
"We take full responsibility for the technical error that caused this problem and have apologized for it," the company said in a statement. "We provided the Commission with a complete and candid assessment of the situation, and we have taken steps ... to help avoid this mistake -- or anything similar -- in the future."
The company is required to offer consumers a choice of browsers through 2014.
In all, Microsoft has now paid a grand total of â¬2.2 billion in fines to the Commission since 1998, when regulators opened their first investigation against the company. Some of those fines were for failing to obey the commission's orders, but this is the first time a company has admitted to breaking a promise made to the EU regulator.
The competitive landscape has changed greatly in recent years, however. Tech companies are now often more concerned about Google Inc.'s dominance in Internet search technology, Facebook's dominance in social networking, and Apple's dominance in mobile phones and software than Microsoft's Windows operating system, though it is still dominant on personal desktop computers.
Rival browsers such as Mozilla's Firefox and Google's Chrome have become popular, and software applications on mobile devices usually bypass browsers entirely.
In a sign of the times, Microsoft itself turned to the watchdog in 2012, asking it to investigate Google for anticompetitive practices.
Copyright 2013 The Associated Press.