New EC probe of Microsoft could have wider market impact

At least initially investors took investigation news in stride, with Microsoft's shares falling just 23 cents to $34.16 despite a broad market sell-off Tuesday afternoon.

Larger impact on market?

London-based economist Mark Chandler told BloggingStocks Tuesday that the second case, if investigators determine that Microsoft acted unlawfully or violated EU rules, may have a larger impact on the market given the market penetration of Microsoft's Office / Outlook products.

"Basically, as it concerns Europe, Europe is an Office / Outlook world and you can't enable either Office or Outlook to run well with competitors' products. The practical reality of that is you can't use any other software to organize meetings, for example, a decided benefit for Microsoft's operating system," Chandler said. "One could argue that in the 1990s there weren't e-mail and meetings software in Europe capable of undertaking these tasks, but that isn't the case now, and these software developers want in."

Chandler could not specify the dollar/euro size of Europe's Office/Outlook market and the possible revenue implications of a negative decision for Microsoft, exclusive of potential fines, but he said the market "had to be in the tens of millions of dollars annually."

To-date, Microsoft has paid more than $1.16 billion in EU fines.