BRUSSELS, Oct 15 (Reuters) - U.S. tech giant Microsoft ( MSFT )

looks set to avoid a French antitrust investigation

into its search operations because regulators are planning to

dismiss a complaint by Qwant, the French rival search engine

said on Wednesday.

Qwant, which has historically relied on Microsoft's ( MSFT ) Bing

platform to deliver search and news results, took a grievance

against Microsoft's ( MSFT ) search practices to the French regulator

earlier this year. It said on Wednesday it may challenge the

decision to reject its case in court or take it to other

authorities.

Qwant had asked the watchdog to take interim action against

Microsoft ( MSFT ) while it decided if there was sufficient grounds for

an investigation.

Qwant Chief Executive Olivier Abecassis said the French

authority's investigators at a June closed-door hearing issued a

recommendation to reject the company's request for an injunction

and complaint.

"In that case we will be left with no other option but to

pursue all available legal avenues to protect our business from

Microsoft's ( MSFT ) egregious abuse, to defend our rights, and to seek

compensation," he said.

The French regulator declined to comment. It is expected to

issue its decision in the next two weeks, though the timing may

still change, people with direct knowledge of the matter said.

Microsoft ( MSFT ) said the Qwant complaint lacks merit.

"The complaint alleges harm to competition in the market for

search, which is dominated by Google," a Microsoft ( MSFT ) spokesperson

said.

Qwant alleged Microsoft ( MSFT ) imposes exclusivity restrictions on

Qwant in search results and search advertising, hampering the

latter's ability to develop its own search engine, and also

alleged it favours itself in allocating search advertising,

according to the French company.

Microsoft ( MSFT ) is a major player in the search-engine syndication

sector, where it provides search results to smaller European

rivals such as Qwant, Ecosia, DuckDuckGo and Lilo.