Oracle: EC has 'profound misunderstanding' of database market; DOJ seems to agree

Oracle: EC has 'profound misunderstanding' of database market; DOJ seems to agree

Summary: Oracle says today that European regulators have a "profound misunderstanding" of the technologies behind Oracle's acquisition of Sun and that there is no evidence of anti-competitive behavior to hold up the acquisition.

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updated: Oracle Corp. schooled the European Commission today on some basic knowledge about open-source technology, lashing out in a statement that the regulatory agency that's currently holding up Oracle's acquisition of Sun has revealed its "profound misunderstanding of both database competition and open source dynamics."

Separately, the U.S. Department of Justice released its own statement, essentially backing Oracle and explaining its reasons for giving the go-ahead for the acquisition and why it felt the deal was not anti-competitive.

The European Commission has expressed concerns over MySQL, delaying the acquisition from moving forward, filing a Statement of Objections today. In a statement responding to the Commission's filing, Oracle wrote:

Oracle's acquisition of Sun is essential for competition in the high end server market, for revitalizing Sparc and Solaris and for strengthening the Java development platform. The transaction does not threaten to reduce competition in the slightest, including in the database market. The Commission's Statement of Objections 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 company argued that "the database market is intensely competitive," with eight strong players and specifically names IBM, Microsoft and Sybase as open source vendors. As for MySQL competing with Oracle products, the company said they are very difference and that there is "no basis in European law for objecting to a merger of two among eight firms selling differentiated products." In its own statement, the U.S. Department of Justice seemed to agree. It wrote:

The Division concluded, based on the specific facts at issue in the transaction, that consumer harm is unlikely because customers would continue to have choices from a variety of well established and widely accepted database products. The Department also concluded that there is a large community of developers and users of Sun’s open source database with significant expertise in maintaining and improving the software, and who could support a derivative version of it

Sun, which was already a financially-troubled company when Oracle made its acquisition bid, recently laid off 3,000 employees as part of a restructuring plans that stems from delays in regulatory approval. Oracle CEO Larry Ellison recently said that delays are costing about $100 million per month.

Oracle noted that Sun's customers "universally support this merger and do not benefit from the continued uncertainty and delay." The company said evidence against the Commission's position is overwhelming. and that it lacks any credible theory or evidence of competitive harm.

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Topics: Banking, Data Centers, Data Management, Enterprise Software, Open Source, Oracle, Software

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57 comments
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  • Seems to me the EC is interested in protecting Open Source...

    ...and not choice.
    ye
    • Perhaps there is a good financial reason

      for Oracle to NEED to keep MySQL (and Sun) running after aquisition.

      AFAIK, to make use of the tax loss carry for buying Sun they need to keep the pieces running for some number of years after
      acquisition.

      If so, the amount Oracle gives up by divesting MySQL might be closer to $1 Billion than it is to nothing.

      As to why the EC would feel so strongly you need to look not to 'competition' vv the consumer, but rather to support for their corporate constituency.

      Had Silicon Graphics managed to sell itself (rather than just go bankrupt) the EC would have made a similar stink about OpenGL.


      PublicComments
    • The EC isn't interested in protecting...

      ...anything but competition.

      In their eyes, for a single company to present two possible database solutions is a complete and total violation of the EC antitrust laws.

      The EC's battle cry is "competition at any cost" and they will do anything, including fining companies to prevent the "loss of competition" whether real or perceived.
      PollyProteus
    • Open Source is choice and ...

      DOJ Anti-Trust has become Anti_Consumer.gov. And has stopped
      protecting competition - I guess there's more advancement in
      supporting the Big Players. Duh.

      Oracle is not just ANY Database Player; it's not even just A database
      player. It controls too many markets, and too much influence where laws
      are made and products bought. The mere fact that DOJ stepped up to
      defend Oracle to the EC is a signal that the DOJ's leash is held by Oracle.

      DOJ you have enough to do in your own back yard. FOCUS!
      jimb01
    • Oracle, just spin off MySQL. Problem solved.

      I don't completely understand the EU's position, but I'm even more baffled by Oracle's obsession with keeping MySQL.

      The open source database is of no real financial value. It doesn't generate profits, so what's the big deal? If they set MySQL free, perhaps as a non-profit organization (like OpenOffice.org), Oracle could still use and support MySQL - although it is unlikely that they would.

      Spinning out MySQL would end the EU's objection and make the open source community more comfortable at the same time.

      Larry, spin MySQL out and let's get on with it.
      WiredGuy
      • IMHO

        the death grip for MySQL is a) a bet for the time, i.e. over time the minutely invested MySQl product will give place to Oracle DB. There was an article recently on ZDN. It says that the majority of OS contributions are made by the companies themselves. That is Open Source is much more a property use issue than an investment issue. b)companies start with MySQL. By the time they outgrow the DB Oracle needs to make the transition to ODB smoothly. It can be done only by directing development of MySQL. Another issue is that Oracle needs to make sure that the small scale DB limits are as low for MySQL as possible. It will encourage people to shift to Oracle DB sooner.
        All IMHO.
        incidental reader
        • The EU is assuming the same thing

          The EU commission is worried about the same issue, that Oracle will direct the development of MySQL to suit their needs. Those needs could be over time, making MySQL's instruction set look more like Oracle's than it now does, or making sure that it never scales very well.

          WiredGuy
    • What choice?

      Vendor lock in?

      Anti-competitive agreements (or threats) against OEMs?

      Monopolistic practices?

      ~

      You call those, choice?
      Wintel BSOD
  • The flipside of that argument I presume is that

    Oracle does not need to acquire MySQL and hence the EC's concerns might be met. How about it Oracle. Sell it or set it free, completely. Put your money where your mouth is. It will not make any difference, right?
    Economister
    • I would think they're paying for it.

      Thus to turn around and give it away doesn't make sense. Furthermore there is some revenue to be had from MySQL. Why give it up?
      ye
      • If its already open source how do you give it up?

        The previous poster is clueless. Sort of like the entire EC.
        No_Ax_to_Grind
        • That response was about as lame as it gets.

          Perhaps you could come up with something that even remotely resembles a rebuttle?
          ye
          • I believe you meant rebuttAL

            In any event, I can not help you if you do not get my point. I do not need to rebut a nonsensical post. There is nothing to rebut.
            Economister
          • That the best you got? Pointing out spelling errors?

            [i]In any event, I can not help you if you do not get my point.[/i]

            Now it's me who is not getting your point even though I don't recall having commented on it. Meanwhile I don't recall seeing a rebuttAL to my points from you.
            ye
          • rebuttal rebuttle

            I disagree. I was about to scuttle the rebuttle myself, but a brief explanation would not be out of order.

            but as there is usually more heat than light in these discussions, I will not hurry back to look for one.
            redking44
    • Exactly

      Exactly right.

      Oracle is nothing, if not a pragmatic company. If they believe noone controls mySql and any can fork the code...

      Then why not simply give into the EC, because their demands essentially mean nothing, and the cost has been $100 million per month.

      Frankly, if I were at Oracle and I truly believed I was giving up nothing, and the cost was $100 million per month...I'd just plain give it up, and get this done.

      But they are fighting on - at a cost of $100 million per month, making it clear they value MySQL much higher than several hundred million dollars.

      And they have no plans to simply fork it from someone else, later.

      rdupuy11
    • Except for...

      The issue of mySQL not being entirely open source, or always free. It has an "interesting" licensing position.

      Ars Technica (http://arstechnica.com/open-source/news/2009/09/ec-fears-oracle-will-kill-mysql-but-is-it-even-possible.ars) has a fairly comprehensive take on it.
      zkiwi
  • The EC has been infiltrated by M$ agents

    Those M$ moles are spreading FUD in the EU so the commission would take their eyes off the real evil.
    Linux Geek
    • Just another..

      pointless rant from the local crazy Stallman cultist... nothing to see here... move along.
      Ceridan
    • LOL - very good love that movie - LOL - nt

      nt
      TheBottomLineIsAllThatMatters