Last week, Google successfully fooled the Federal Trade Commission into believing that it has somehow benefitted consumers by promoting its own services over those of competitors. The FTC wrist slap was quite a reversal of the Microsoft antitrust ruling from a decade earlier in which the software giant’s bundling of IE in Windows was declared illegal. And although I won’t bore you with my opinions about Google’s competitive practices, I do think this decision has some ramifications for all of us going forward.

The FTC’s retreat couldn’t have come at a worse time for Microsoft. The firm recently shipped Windows 8, which it intended to bridge the gap between the PCs of the past and the devices of the future. But demand has been tepid at best. Internally, Microsoft blames PC makers for the slow start, and there’s some truth to that. But as the market researchers at NPD pointed out recently, the netbook and then a subsequent generation of super-low-cost PCs -- which I think artificially inflated Windows 7 sales and set unrealistic expectations for Windows 8 -- essentially killed the PC market from within, and just as tablets started taking off. (See also, "Google Drops ITC Patent-Infringement Claims Against Microsoft," January 9, 2013).

The result is that Microsoft’s core market -- Windows-based PCs -- is devalued. The average selling price of notebook PCs at retail is a woeful $420, and businesses and consumers alike are stretching out PC lifecycles ever longer. Meanwhile, mainstream, full-sized tablets -- those with roughly 10-inch screens -- have been stuck at $500 and up since the iPad first debuted almost three years ago. Undercutting them, finally, are a crop of reasonable alternatives. But they’re running Google’s Android OS, not Windows. Windows tablets start at $500 and go up from there.

With Android taking Microsoft’s traditional place at the high-volume, low-price end of the tablet market, the firm is gaining control of what will eventually be the mainstream computing market. The switchover will take years, and hybrid Windows 8 PCs might see some success with the productive few who see the benefit of a single device that can do it all. But I’ve yet to see a prediction suggest that Microsoft will ever be anything more than third in a market that will have three main players: Apple (iPad), Google (Android), and Microsoft.

Unfettered by the FTC indecision, Google can now continue doing what Microsoft was prevented from doing in the wake of its own antitrust ruling: It can continue bundling its own products together, regardless of its market power, reach, or even monopoly. Heck, the FTC even found that Google benefitted consumers in some way by screwing over competition and pushing its own services artificially higher in search results. Imagine what the company can do with this strategy when applied to other aspects of its business, like Google Apps -- which ostensibly competes with Microsoft Office and Office 365 -- and Android.

Of course, bundling products and services is often described with a friendlier name: integration. And it makes sense that people who like one of Google’s offerings might like other Google offerings. The trouble is that a coming generation of computer users no longer expects Windows or Office. Indeed, many have very little experience with either. And systems such as Apple’s iPad, or Android and Google Apps, might simply be good enough, especially when users have had no experience with more powerful alternatives.

I’ve always been personally fascinated by the notion of simplicity, or “good enough” computing. And the rise of solutions such as Android and Google Apps reminds me of my first experience with Linux, which back in the mid-1990s meant the floppy-based Slackware distribution. Watching a friend create floppy after floppy of the disks needed to install Slackware on a PC, I ruminated about how Microsoft could possibly compete with free. And I wondered what the company would do when someone made a free Linux alternative to Office.

In the intervening years, Linux and free Office alternatives such as OpenOffice in fact never mounted a serious challenge to Microsoft, most likely because the barrier for entry was so high. After all, before you could install Linux and OpenOffice on a PC, you had to have a PC. And that PC came with Windows already. Most also came with Microsoft Office. So you really had to want it. And few did.

Google’s pervasive online services have no such barrier. They work equally well on Windows PCs, Macs, and mobile devices based on Android or Apple iOS (iPad, iPhone). And although Google likes to explain that competition is “only a click away” -- a bit of chicanery that’s only slight less ludicrous than the firm’s “Don’t be evil” mantra -- that’s absolutely untrue. With online services, lock-in is in many ways more insidious than is lock-in on a PC or device. I mean, sure, I could probably find a replacement for Facebook if I wanted, you know, it’s only a click away. But all of my friends and family are on Facebook. I’m basically a hostage to that service.

So it will be with your data when you buy into an online service, whether its Microsoft’s Office 365, Google Apps, or anything else. The trouble is, Microsoft at least understands IT and builds online services that can integrate with existing on-premises systems, giving you a hybrid solution for today and, possibly, a cloud-only upgrade path for the future. Google? Not even close.

I’m worried about a future in which Google can simply bundle its own products and services without regard to the competition. And as the firm gains a majority and perhaps monopoly share of the smartphone market with Android, and a huge share of the tablet market, I’m staring at a future the US Department of Justice tried to avert with its own charges against Microsoft. Only this time, it will be Google, not Microsoft, and rather than hinder the company’s aims, the government will have helped it achieve this dominance.

For more Microsoft insight, check out Paul Thurrott's article "Microsoft's Cloud Future: Maker of Devices and Services."