Microsoft's decision toputs rivals such as McAfee and Symantec in a tough position.
To be sure, those two--and other rivals--will be able to tout products that offer a broader range of features than Microsoft plans to deliver with "Morro" next year. At the same time, "nada" is a tough price to compete against.
That raises the question of whether those companies or others may look to antitrust regulators for help. We've put queries into those companies and also posed the antitrust question to Microsoft. I'll let you know what we hear back.
One thing in Microsoft's corner is the fact there are already free antivirus products on the market, such as AVG, though typically security vendors look to upsell consumers from low-cost or free products to higher-end ones.
Microsoft appears to be getting out of the paid security software business, at least on the consumer end. (Microsoft still plans to offer paid security products for businesses).
Also, Microsoft said it plans to deliver Morro as a free download rather than bundling it with the operating system--another move that could dampen some antitrust concerns.
It's unclear whether giving away software that others charge for will ultimately be enough to justify regulatory action. Although one antitrust lawyer predicts rival security firms will complain and that antitrust authorities will listen.
"Sure, there will be antitrust issues. They're just...daring the antitrust authorities to knock it off," said Daniel Wall of the San Francisco firm of Latham & Watkins. "This is an old issue, the notion of them giving away for free products that others sell and it is absolutely guaranteed to get the attention of the antitrust authorities in Europe, Korea, Japan, and other jurisdictions."
"They're incorrigible," Wall said of Microsoft.
Antitrust regulators in the U.S. have tended to focus on harm to consumers as opposed to competitors. Authorities in Europe and Korea have taken a broader view, taking action against Microsoft for actions deemed to hurt competitors, such as bundling its media player into Windows.
Both Europe and Korea have required Microsoft to offer versions of its operating system without certain components. In this case, though, Microsoft is not talking about distributing the antivirus code as part of Windows itself.
Representatives from Microsoft, Symantec, and McAfee were not immediately available to comment.
CNET News' Elinor Mills contributed to this report.
Update 4:45 p.m. PST: Here's what Microsoft had to say.
"We are focused on addressing the security needs of consumers," Amy Barzdukas, a senior director in Microsoft's Online Services and Windows Division, said in a statement. "We will, of course, continue to comply with any government rulings."
Update 6:25 p.m.: And we got comment from security firms McAfee and Sophos.
McAfee spokesman Joris Evers, asked if his company would raise an antitrust complaint over Microsoft's move, said: "It's too early to say anything about that."
Over at Sophos--which focuses on the enterprise market and so doesn't compete with Microsoft's consumer security products--Senior Technology Consultant Graham Cluley predicted antitrust issues would not arise.
"I am no expert on such things, but provided Microsoft does not bundle 'Morro' in with its operating system I would be surprised if there were antitrust issues," he said in an e-mail. "Anything which encourages more people to run antivirus has to be good news for all of us."
Asked if Microsoft would ever consider bundling the security features into Windows, Microsoft's Barzdukas said: "I can't foresee such a time."