Microsoft Corporation (MSFT) Battling Malware in Court

Microsoft CorporationMicrosoft Corporation (NASDAQ:MSFT) is facing an unusual enemy in its battle or increased market share in the PC and tablet market. This enemy, however, may be more dangerous than anything that Apple Inc. (NASDAQ:AAPL) or Google Inc. (NASDAQ:GOOG) can throw at it in the marketplace. And the maker of the Windows operating system is taking the enemy to court.

A report from the Associated Press says that Microsoft Corporation (NASDAQ:MSFT) is suing a Chinese man for hosting a web domain that contains, it alleges, “Nitol and more than 500 other types of malware, making it the largest single repository of infected software that Microsoft officials have ever encountered,” according to Microsoft, which is suing Peng Yong, who runs the web domain.

Can you imagine opening a brand-new, straight-from-the-factory laptop computer, turning it on for the first time, and watching it take on a life of its own? This malware, known as Nitol, was discovered by a Microsoft Corporation (NASDAQ:MSFT) worker in China who was tasked with investigating counterfeit software. This particular laptop, in turned out, became part of an illegal collection of computers that were capable of invading web sites, hacking into back accounts and making off with personal data. Nitol and other malware, Microsoft contends, were traced back to the domain, and Peng is listed as the owner.

These illegal networks – also called botnets – have become more prevalent in cybercrime lately, it is found by investigators. And it turns out that while officials do continually warm computer users to be very wary of opening e-mail attachments from unknown or suspicious sources, now it seems that the malicious software is getting onto newly manufactured computers. Microsoft Corporation (NASDAQ:MSFT) Windows software has been vulnerable to malware and viruses for years, as many manufacturers are known to cut costs by cutting corners, using counterfeit software instead of genuine Windows software in order to produce laptops and desktops as cheaply as possible. Those counterfeit versions leave holes open for cyber attacks.

Cyber attacks have been a prevalent problem for Microsoft Corporation (NASDAQ:MSFT), and while it should protect itself and its partners from malicious malware producers, it also should make every effort to sanitize and protect its operating system from counterfeiting so it can establish more control of its products as they go to market. That would be a valuable step for investors like hedge-fund manager Seth Klarman of Baupost Group to see from the company.