(Adds Google comment)
By Peter Kaplan
CHICAGO, June 19 (Reuters) - Microsoft Corp. (MSFT.O) has agreed to modify its Windows Vista operating system in response to a complaint that its computer search function put Google Inc. (GOOG.O) and other potential rivals at a disadvantage, the Justice Department and Microsoft said on Tuesday.
Under an agreement with the department and 17 state attorneys general and the District of Columbia, Microsoft will build into Vista an option to let users select a default desktop search program on personal computers running Windows.
The function, known as "Instant Search," allows Windows users to enter a search query and get a list of results from their hard drive that contain the search term.
The agreement was made public as part of a joint report that the Justice Department and Microsoft filed late on Tuesday with the court overseeing Microsoft's compliance with a 2002 antitrust consent decree.
As part of the deal, a Microsoft official said the company also had pledged to place links inside the Internet Explorer window and the "Start" navigation menu to make it easier for people to access that default desktop search service.
The changes will be introduced in a service pack, or updated version of Windows Vista software. Microsoft said it anticipates a test version of the Vista Service Pack 1 to be ready by the year-end.
Under the agreement, Microsoft also promised to provide additional technical information to third-party developers, such as Google, in order to optimize the performance of their desktop search service on Vista.
"These remedies are a step in the right direction, but they should be improved further to give consumers greater access to alternate desktop search providers," David Drummond, Google's chief legal officer, said in a statement.
The changes stem from a complaint Google filed with the Justice Department in December, in which it argued that a feature built into Vista that allows users to search a computer's hard drive did not leave room for competition from other desktop search applications.
Google said the feature violated the consent decree that monitors Microsoft's conduct as part of its settlement with the government.
"We are pleased that as a result of Google's request that the consent decree be enforced, the Department of Justice and state Attorneys General have required Microsoft to make changes to Vista," Drummond said.
The agreement is expected to be presented to the judge monitoring the consent decree, U.S. District Judge Colleen Kollar-Kotelly, at a June 26 court hearing.
The Microsoft consent decree, which settled the government's landmark antitrust case against the company, is scheduled to expire in November. However, some provisions have been extended to November 2009.
Microsoft has called Google's complaint "baseless" and said it was in compliance with the antitrust settlement.
(Additional reporting by Daisuke Wakabayashi in Seattle and Eric Auchard in San Francisco)
((Editing by Toni Reinhold & Ian Geoghegan; e-mail: firstname.lastname@example.org; +1 202 898 8463)) Keywords: MICROSOFT GOOGLE/
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