Government regulators on Friday dismissed claims that Microsoft's newest browser, Internet Explorer 7, gives the Redmond, Wash. company's own search engine an unfair advantage, knocking aside objections that Google recently raised.

The Justice Department has evaluated the search box -- a new feature in IE 7 that lets users initiate searches -- and concluded it "respects users' choices" and "is easily changed," according to a status report released Friday by federal and state officials.

Earlier this month Google complained that IE 7, which will ship later this year for Windows XP and within Microsoft's new operating system, Windows Vista, in January 2007, wasn't letting users pick a default search engine when it was installed.

"We don't think it's right for Microsoft to just set the default to MSN on install," Marissa Mayer, vice president for search products and user experience at Google, said then.

Microsoft's counterattack charged that Google wanted the default spot, and last week chief executive Steve Ballmer dismissed Google's complaint as sour grapes.

The Justice Department report said that although IE 7 may default to MSN's search service in some cases, it concluded the feature didn't violate the terms of Microsoft's antitrust agreement with the federal and state governments.

"OEMs are allowed to set the default search engine when the machine is first sold to a user, and Internet Explorer 7 itself includes a relatively straightforward method for the user to select a different search engine from the initial system default," the report read.

The number of steps to change the default search engine in IE 7 and Firefox, the open-source browser supported by Google with advertising revenue, are in fact identical: five.

Google has also raised the issue with European Union's antitrust regulators, who remain locked in a long-running case about Windows XP that recently went to appeal. The EU's Competition Commission has said it is looking into concerns that Windows Vista might also violate antitrust laws when it's released in 2007.

In the U.S., however, the matter appears closed. "Plaintiffs have concluded their work on this matter," Friday's report said.

The text of the status report can be viewed here, or downloaded in PDF format from the Department of Justice's Web site.