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6/20/2007
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Microsoft Search Compromise Could Hinder Innovation

An antitrust complaint filed by Google is forcing Microsoft to change the way its Windows Vista operating system handles desktop search queries ... and perhaps its future.

Microsoft has agreed to provide its end users and manufacturing partners like Dell and HP with the ability to set the default desktop search program and to run the designated search program "whenever Windows launches a new top-level window to provide search results." The agreement doesn't cover "Explorer" search windows found in operating system window panes. These will remain tied to Vista's internal search, though Microsoft plans to add a link to such windows that will launch the default desktop search program.

Microsoft also must inform customers and partners that desktop search in Vista "is designed to run in the background and cede precedence over computing resources to any other software product." Presumably Google sees Vista's internal search as a processor hog.

The question is whether Microsoft's concessions to Google will really make the software industry more competitive.

Keith Hylton, professor of law at Boston University and author of a textbook on antitrust law, sees Microsoft's decision to cooperate primarily as a calculated compromise to avoid costly litigation. "Google is a deep-pocketed firm and is capable of going into court and sticking it out as long as Microsoft is willing to keep litigating," he said. "And there are still a few state attorneys general who want to bring a case, too."

While a compromise may benefit Microsoft in the short term, "there's a long-term cost," Hylton said. "Microsoft's Vista search function is an improvement on its own product. And if you say to a dominant firm like Microsoft, when you make an improvement to your product, you have to now protect the interests of rival firms, that's going to reduce the incentives to make those improvements."

"Traditional antitrust law hasn't imposed a duty on firms to protect their rivals when they innovate on their own products," said Hylton, acknowledging that what a company calls "innovation" may really be anticompetitive behavior.

But Hylton believes the government's antitrust case against Microsoft implies such an obligation. "Before that case, there wasn't much out there in the law that would have suggested a duty to look out for rivals when you engage in technological innovation," he explained. "That kind of principle, once it becomes something that's understood to be backed up by the law, then it can come back to bite Google or any dominant firm."

Indeed, if Google's growth continues, it may not be long before Ask, Microsoft, and Yahoo sue for the right to field search queries submitted through Google search boxes.

Editor's note: This story incorrectly reported that disclosure of the material submitted by Google would be a crime, and was modified on June 21 to reflect that investigatory material, such as that filed by Google, is not subject to disclosure under the California Public Records Act.

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