EU probes Oracle's acquisition of Sun

 

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By Reuters

Posted on 3 Sep 2009 at 13:51

EU antitrust regulators have launched a probe into Oracle's $7 billion takeover of Sun, expressing concerns that the deal could dent competition in the database market.

With Oracle's databases and Sun's open-source MySQL competing directly in many sectors of the database market, MySQL is widely expected to represent a greater competitive constraint as it becomes more widely used, the EU executive claims.

"The Commission has an obligation to ensure that customers would not face reduced choice or higher prices as a result of this takeover," says Competition Commissioner Neelie Kroes.

The Commission will rule on the deal on 19 January 2010, putting Oracle months behind its original plan for closing the deal. It could also allow rivals more time to poach hardware customers from Sun.

I would not read too much into the investigation. The Commission has different sets of documents than the US authorities. I would imagine the issues are broadly the same

HP and IBM have been offering discounts and other incentives to woo Sun customers since Oracle agreed to buy Sun in April, playing up concerns that Oracle might have trouble running a hardware maker.

"I would not read too much into the investigation. The Commission has different sets of documents than the US authorities. I would imagine the issues are broadly the same," says Christopher Thomas, a Brussels-based antitrust lawyer at law firm Lovells.

"At this stage, it is too early to say if this is particularly bad news for the transaction itself though it will affect the timing of the transaction," adds Thomas, who is advising companies on the deal.

Analysts have expressed doubts on whether Oracle's acquisition of MySQL would stifle competition in the $19 billion a year database market. Sun generates about $300 million in revenue from MySQL, as opposed to the $9.2 billion made by Oracle.