EU issues objections to Oracle's Sun acquisition

The Commission's statement of objections focuses on its concerns about Oracle owning the open-source MySQL database

The European Commission on Monday issued its formal "statement of objections" over Oracle's planned acquisition of Sun Microsystems, saying the deal would harm competition in the database market.

Oracle responded that it would "vigorously oppose" the Commission, saying its position reflects "a profound misunderstanding of both database competition and open source dynamics." The U.S. Department of Justice, which has already approved the deal, also weighed in, saying it studied the deal carefully and concluded that it is "unlikely to be anticompetitive."

The statement of objections was rumored to be imminent last week, and follows the Commission's decision in September to launch an in-depth probe of Oracle's planned Sun acquisition. It is a procedural step in European antitrust investigations that paves the way for Oracle to make a formal response.

"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," Sun said in a regulatory filing with the U.S. Securities and Exchange Commission.

The statement of objections is "a preparatory document" and does not necessarily mean the Commission will block the merger, Sun said. It also noted that any final decision can be appealed.

The text of the Commission's objections to Oracle was not released publicly. The Commission is supposed to issue a ruling on the matter by Jan. 19.

Oracle announced its plan to acquire Sun in April for US$7.4 billion. The deal was approved by U.S. competition regulators after a brief review, but the Commission said it was concerned about the effects of the acquisition on Sun's MySQL open-source database, which it acquired last year.

In a foretaste of the arguments it will present to the Commission, Oracle asserted in a statement Monday that the deal "does not threaten to reduce competition in the slightest, including in the database market."

"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," Oracle said.

It characterized the database market as "intensely competitive with at least eight strong players, including IBM, Microsoft, Sybase and three distinct open source vendors."

It also argued that the deal is "essential for competition" in the high-end server market because it would revitalize Sun's Sparc processor and Solaris OS platforms. It would also strengthen the Java development platform, according to Oracle.

"Given the lack of any credible theory or evidence of competitive harm, we are confident we will ultimately obtain unconditional clearance of the transaction," the company said.

Oracle is no stranger to antitrust investigations. The U.S. Department of Justice tried to block Oracle's acquisition of PeopleSoft on the grounds that it would unacceptably contract the enterprise software applications market to two large players, Oracle and SAP.

Oracle won that case in 2004, by convincing U.S. District Court Judge Vaughn Walker that there were many other competitors in that market, albeit smaller ones.

The DOJ issued its own statement Monday explaining its decision to approve the Sun-Oracle deal. It said there are "many open-source and proprietary database competitors" and that there is a large community of open-source developers with expertise in maintaining and improving Sun's open-source software.

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

Oracle CEO Larry Ellison has said that Sun is losing $100 million per month as it waits for the deal to close.

On Friday Sun released its financial results for the last quarter, ended Sept. 27. Revenue was $2.24 billion, down from $2.99 billion a year earlier. Its losses narrowed to $120 million, from $1.68 billion in the same quarter last year, thanks largely to cost-cutting efforts.

Tags euSun MircosystemsOracleMergers and acquisitions

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

James Niccolai

IDG News Service

Comments

Comments are now closed.

Most Popular Reviews

Follow Us

Best Deals on GoodGearGuide

Shopping.com

Latest News Articles

Resources

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Latest Jobs

Shopping.com

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?