The New York Times reported over the weekend that the top antitrust official at the Justice Department was helping Microsoft (NASDAQ: MSFT), urging investigators to reject complaints of antitrust practices at both the federal and state level.
The world's largest software company may have needed the help. The Wall Street Journal writes [subscription required] that Google (NASDAQ: GOOG) prepared a detailed report that was given to the government in April. The report detailed how Microsoft's new operating system, Windows Vista, puts rivals at a disadvantage. At the core of the complaint is the allegation the Microsoft's desktop search, which helps users look for data on their own PCs, makes it difficult for customers to download rival products.
If the government decides to push the issue, Microsoft could be in for another long round of antitrust prosecution. It has already paid out penalties to Time Warner (NYSE: TWX) for hurting the Netscape browser franchise and to RealNetworks (NASDAQ: RNWK) for unfair competitive practice in the media players space. The European Union is still fighting with Microsoft about how it has abused its monopoly power in the region.
Google is shrewd. Anything that ties up Microsoft in its flagship OS business takes resources away from the company's other ventures, such as the search market. It also allows Google a better footing as it goes to market with word processing and spread sheet products of its own.
And Google does not even have to pay the legal fees.
Douglas A. McIntyre is a partner at 24/7 Wall St.