Microsoft Probe Could Last Years : Antitrust: A Justice Dept. inquiry will try to determine whether the software giant stifled competition in its bid to dominate the PC arena.

The Justice Department’s new antitrust probe of Microsoft Corp. is expected to answer the question that the Federal Trade Commission could not: whether the software giant broke the law and stifled competition.

The world’s biggest maker of PC software will come under the scrutiny of federal prosecutors in an investigation that could last for years despite promises of a speedy outcome.

Just as the FTC dropped a 38-month investigation earlier this month, the Justice Department revealed it had begun its own inquiry into alleged anti-competitive behavior at the Redmond, Wash.-based company, making use of vast data collected by the FTC.

The “non-public” FTC probe ended after the five-member panel deadlocked twice in 2-2 votes--with one abstention--on the question of whether to take formal action against Microsoft.

“There’s obviously at least a minority on the (FTC) panel who believe there’s a problem,” said David Rothschild, an analyst at Piper, Jaffray.

Lawyers familiar with federal antitrust investigations and high-technology issues expect the Justice Department’s antitrust division to be more adversarial than the FTC.

“Microsoft isn’t out of the woods yet,” said one of the lawyers, noting that a Justice Department investigation into alleged antitrust practices by IBM stretched from 1969 until 1982.

Most analysts note major differences between the situation of software maker Microsoft and computer giant IBM, whose virtual control over the market for huge mainframe computers gave it tremendous clout in the corporate computing world.

Complicating the scenario, the lawyers said, was that the new head of the Justice Department’s antitrust division, Anne Bingaman, has taken office with aggressive plans to enforce antitrust laws after several years of neglect.

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Microsoft has denied any wrongdoing, saying it is confident the company’s business practices will be vindicated.

In fact, judging from its aggressive--and successful--legal response to a 1988 lawsuit brought by Apple Computer Inc. and an array of other legal challenges, some analysts say the Justice Department should not expect an easy victory.

Financial analysts noted that the Justice Department will not be burdened by the panel approval process that blocked the FTC probe, but they consider it unlikely that the department will take actions that would in some way dismantle Microsoft.

Microsoft has said that the FTC investigation, which began in 1990, was initially concerned with an alleged anti-competitive accord between Microsoft and IBM.

The two companies have since gone their separate ways, but in April, 1991, Microsoft learned that the inquiry had been broadened to include third-party complaints that it sought to monopolize the market in PC operating systems, software and peripherals.

Microsoft supplies MS-DOS operating system software, which, along with Intel Corp.’s microprocessors and the PC standard first set by IBM, has transformed the computer industry.

MS-DOS runs on more than 120 million PCs worldwide, and 20 million to 30 million more are sold yearly.

The company also sells applications, such as word processing programs, and the now immensely popular Windows software.

Industry executives say the FTC was believed to be investigating claims that Microsoft stifled competition by offering discounts to customers who paid a per-unit royalty fee for use of MS-DOS on high-volume PC configurations.