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EU objects to Oracle's acquisition of Sun

EU objection

By Stuart Turton

Posted on 10 Nov 2009 at 08:28

The European Commission has officially objected to Oracle's $7.4bn acquisition of Sun.

According to a Securities and Exchange Commission filing from Sun, the EU has presented the companies with a statement of objections to the proposed deal.

"The Statement of Objections sets out the Commission's preliminary assessment regarding, and is limited to, the combination of Sun's open source MySQL database product with Oracle's enterprise database products and its potential negative effects on competition in the market for database products," says Sun in the filing.

Oracle immediately fired back at the EC, claiming the decision "reveals a profound misunderstanding of both database competition and open-source dynamics.

The decision reveals a profound misunderstanding of both database competition and open source dynamics

.

"It is well understood by those knowledgeable about open source software that because MySQL is open source, it cannot be controlled by anyone. That is the whole point of open source.

"The database market is intensely competitive with at least eight strong players, including IBM, Microsoft, Sybase and three distinct open source vendors. Oracle and MySQL are very different database products. There is no basis in European law for objecting to a merger of two among eight firms selling differentiated products," the company adds.

Oracle pointed to the US Department of Justice's decision to pass the deal as evidence of its point. The DoJ swiftly released its own statement on the matter.

"After conducting a careful investigation of the proposed transaction between Oracle and Sun, the Department's Antitrust Division concluded that the merger is unlikely to be anticompetitive," says the DoJ.

"At this point in its process, it appears that the EC holds a different view. We remain hopeful that the parties and the EC will reach a speedy resolution that benefits consumers in the Commission's jurisdiction," it concludes.

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User comments

If I were Oracle I'd divest MySQL and get it over with. It doesn't particularly matter that the EU Commission is pig ignorant about open-source. They don't like Americans and they don't like being challenged. For Oracle it's just not worth the grief, as Microsoft can attest.

By c6ten on 10 Nov 2009

Why are Oracle getting so hot under the collar about objections to them owning the principal support for their main competitor in many EU markets, unless they see that as one of the main attractions for them in the deal? Just because MySQL is OpenSource does not mean it does not deprive Oracle of money it might otherwise be up for.

By SwissMac on 11 Nov 2009

Would the EU object as much if it were SAP buying Sun?

Europe has a beligerent history of "national champions" that violate EU guidelines, if not laws. I wouldn't be surprised if they looked forward to Union Champions...

By Phoomeister on 11 Nov 2009

I like it :)

I like increased competition - better value end of the day.

If M$ bought Apple would the American Commission do anything? - I would hope and expect that they would do so.

By nicomo on 11 Nov 2009

This is about Market Share

If you had not figured it out already, this is about Market Share - NOT Competition.

Oracle will likely not provide the significant resources to maintain and expand MySQL to anywhere the level that Oracle provides.

Would you maintain to virtually identical products, one totally free, the other exorbitantly expensive, and expect everyone to stick with the expensive one?

Oracle might make some token gestures initially, but will very quickly push and goad MySQL users to move to Oracle perhaps by tempting them with a lightweight Oracle product and discounted licence fees to move over, then slowly depreciate and discontinue MySQL.

When there are 8 products on the market Oracle would not loose any sleep over loosing a few MySQL hardcore users to the competition.

WAKE UP

If this merger is going to be permitted, Oracle must be forced to sign a contract guarenteeing that Oracle will maintain and expand MySQL and not compel users to move over to Oracle by not supporting MySQL properly.

By j_woolliscroft on 12 Nov 2009

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