June 20, 2007 4:39 am

Microsoft heads off antitrust challenge

Microsoft succeeded in heading off an antitrust challenge from Google, as it reached an accord on Tuesday night with US regulators to make minor modifications to its new Windows Vista operating system.

The resolution also smoothed over a rift that appeared to have opened up between the US justice department and state regulators over the Google complaint. According to a report in the New York Times, the DoJ angered several state attorneys general by urging them not to support the Google complaint.

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Google’s complaint, and the divisions it opened up between federal and state regulators, represented one of the stiffest challenges Microsoft has faced since its 2003 settlement of the US government’s antitrust case.

Under that agreement, regulators were charged with closely monitoring Microsoft’s compliance with rules designed to prevent the sort of practices that enabled it to overhaul competitors like Netscape in internet browsers and RealNetworks in media players.

In a report filed in federal court in Washington on Tuesday, the DoJ and state regulators said they were “collectively satisfied” that changes promised to the Vista operating system would resolve Google’s complaint.

“We’re pleased we were able to reach an agreement with all the states and the justice department that addresses their concerns so that everyone can move forward,” said Brad Smith, Microsoft general counsel.

Google’s complaint was initially lodged last December after Microsoft released its first version of Vista to business customers. Google’s protest concerned the desktop search software that helps PC users find information on their machines. Google claimed that by embedding its own search software in Vista and making it hard for PC makers and users to turn to rival products like those from Google, Microsoft was giving itself an unfair advantage.

Microsoft made clear in recent days, after the issue became public, that it was prepared to make changes to Vista to resolve the charges, even though it continued to argue that Google’s claims were unfounded, and that the type of software involved was not covered by the 2003 settlement.

Under the compromise reached with regulators on Tuesday, Microsoft is to make a number of changes to Vista’s desktop search software when it releases its first update to the operating system, due before the end of this year. It has agreed to create a mechanism for users and computer makers to select a rival programme to act as the default when they carry out desktop searchs, and for the default software to be launched automatically from a number of windows in the operating system.

Microsoft has also agreed to provide information to computer makers and other software companies about capabilities already in Vista that makes it easier for them to use rival desktop search programs.

The software group had argued earlier that it had already put in place a number of features in Vista to make it possible for computer makers and users to find and use rival desktop search programmes.

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