Microsoft may be illegally entering search market, says US

Massachusetts said on Wednesday that it is continuing to investigate whether Microsoft is unlawfully wielding its desktop dominance in its plans to enter the red-hot search engine market.

The state, the only one still pursuing antitrust claims against Microsoft, said in a legal filing that it is still reviewing "issues regarding internet search engines, document format programs and other functionalities that Microsoft allegedly plans to incorporate into the next version of its Windows operating system."

Microsoft has said that it plans to release a new search engine in the next year and embed better search features in its next-generation Longhorn operating system.

A federal appeals court is weighing Massachusetts' appeal to a final ruling by US District Judge Colleen Kollar-Kotelly that approved a settlement deal and effectively ended the long-running antitrust case. In its legal filing, Massachusetts took a swipe at the settlement, saying its "competitive impact" in some areas appears to be "essentially nonexistent."

Declan McCullagh writes for CNET News.com