Imagine someone coming into your room and watching you every day as you go about your business, looking through your stuff, waiting for you to make a mistake.  This unpleasant sounding scenario is analogous to what Microsoft is facing as Windows 7 is being reviewed by the federal government.

With Windows 7 set to likely launch holiday 2009 (based on Bill Gates and CEO Steve Ballmer's public remarks), Microsoft handed over the code and copies of Windows 7 in its current state to Department of Justice Technical Committee (TC) members to comb for possible antitrust violations.

The TC is the result of a long legal battle between Microsoft and smaller competitors in various fields, which all allege that Microsoft tries to write its Windows code in such a way to exclude them by defaulting to Microsoft applications.  The U.S. government agreed that such anticompetitive antitrust violations were occurring and in November 2001, Microsoft finally agreed to settle with the U.S. government and face oversight.

With the final judgment a year later, Microsoft was forced to deal with inspectors during the development of Windows Vista.  The inspection, which now is going on with the new OS focused on four key middleware categories -- e-mail, instant messaging, media playback and web browsing.

The effects on Microsoft can easily be speculated.  While it might have been coincidence, when inspections started between 2004 and 2005, Microsoft made little progress on Internet Explorer, while Mozilla released Firefox and Thunderbird.  Some speculate that this was due to Microsoft trying to remove Windows code that defaults services to IE and Outlook, or trying to make such code more subtle.

Meanwhile in the messaging sector, Microsoft abandoned Windows Messenger altogether, splitting it into MSN Messenger for private users and Office Communicator for business users.  Both programs were much less attached to Windows than their predecessor.

In the aftermath of Vista, Google complained that Microsoft was violating the terms of its agreement and defaulting search traffic away from Google.  The complaint eventually led in part to an extension of the supervisory period by the TC over Microsoft.

Microsoft, which had likely been eagerly anticipating freedom from inspectors has now been forced to live with U.S. District Judge Colleen Kollar-Kotelly verdict of two more years of oversight -- about the amount of time needed to develop Windows 7.

Each month the Justice Department, the states' attorney generals, and Microsoft file a joint "status report" and the first one just came out offering insight into how Windows 7 is faring in the inspectors’ eyes.  The first report came June 17 and offered the following overview of the process:

Microsoft has recently authorized TC access to another early build of Windows 7 (the successor to Vista), which the TC will review. As the builds of Windows 7 progress, the TC will conduct middleware-related tests in an effort to assure that bugs fixed in Vista do not reappear in the next operating system, as well as to assure final judgment compliance generally.

The "bugs" referred to are compatibility issues with various software that Microsoft mostly fixed over the course of Windows Vista's development.  Microsoft contends that these were due to tricky communications flaws, not purposeful attempts to break competitors' products.

The report adds:

The TC's on-going review of Windows' treatment of middleware defaults is being expanded to include an operating system source code scan in an effort to determine whether some commonality in the code accounts for default overrides. The TC also is investigating certain default browser overrides, which Microsoft asserts arise from reasonable technical requirements that competing browsers apparently do not implement. The TC will discuss its findings with Microsoft once this inquiry is concluded.

The latter part refers to the ongoing review of the beta version of Microsoft's Internet Explorer 8 browser.  More interestingly it reveals that unlike previous investigations, the TC has moved up to actually scanning the Windows source code.  Investigators hope to use this to spot any antitrust violations, even subtly coded ones.

Meanwhile Microsoft is forced to watch and wait while the DOJ continues its investigations.  It is entirely possible that its staff will have to make major changes to the code of Windows 7 and IE 8 to make them acceptable to the TC.  Worse yet, as eWeek's Joe Wilcox points out, "Microsoft is making a godawful amount of Internet Explorer changes and taking risks with application and Web site compatibility. Surely somebody will try to interfere with the changes for competitive gain. Will it be Apple, Google or Mozilla?"

The world of inspections is not a pretty one for Microsoft, but it’s one that for the time being it must live with.