Microsoft is under investigation over claims that advertisements for its hand held computers were misleading.

According to Press Association reports, the Federal Trade Commission is to probe a advertising campaign which made a comparison between Microsoft's products and those of chief rival Palm.

Complaints have been made that Microsoft's ads did not clearly explain that Microsoft users would need to buy a separate modem to perform certain functions.

Microsoft has downplayed the significance of the FTC investigation, which it suggests only involves questions about the "font size and graphics" in the advertisements. It says recent campaigns for its Pocket PC products have used an altered advertisement.

The investigation comes at a time when Microsoft is trying to grab share from Palm.

According to US retail market watcher PC Data, Palm's January 2001 market share fell to 60.5 per cent from 65 per cent in December 2000. PalmOS licensee and number two in the market Handspring saw a single percentage point drop, from 27 per cent to 26 per cent.

The figures mean that Windows CE's share of the market grew 5.5 per cent month on month, which should not be taken to indicate a major decline in interest in PalmOS based kit. ®

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