Judge sides with Google regarding software contracts

SAN FRANCISCO – A federal judge has sided with Google Inc. in a lawsuit alleging the U.S. Department of Interior improperly favored Microsoft Corp. in a deal that could have had ripple effects on future software contracts with other federal government agencies.

The U.S. Court of Federal Claims ruling unsealed late Tuesday blocks the Interior Department from awarding Microsoft a five-year contract to run its new e-mail system by a planned Jan. 25 deadline.

Susan Braden, the federal judge overseeing the 2-month-old case, issued a preliminary injunction after concluding the Interior Department had rigged the bidding to give Microsoft the upper hand despite Google’s repeated attempts to prove it could meet the government’s security and technology requirements.

Google contended the Interior Department stifled competition by demanding that all bids include Microsoft’s suite of business software, including its Outlook program for e-mail and scheduling.

Although it still makes most of its money from selling Internet ads, Google has spent hundreds of millions of dollars in the past four years assembling an e-mail system and other software applications aimed at luring customers away from Microsoft in an attempt to siphon revenue away from its fiercest rival.

Braden backed Google in a 27-page ruling that quoted the company’s rationale for filing the lawsuit in late October. She agreed that the Interior Department’s prerequisites threatened to create an “organizational lock-in” that would have given Microsoft a “significant prejudicial, if not insurmountable, advantage in future competition.”

The Interior Department could still appeal the injunction, a process that would likely take months to resolve. The agency declined to comment Wednesday, citing its policy against discussing active lawsuits.