EC voices formal objections to Oracle-Sun deal

EC voices formal objections to Oracle-Sun deal

Summary: European regulators have formally objected to Oracle's planned acquisition of Sun, while Oracle intends to fight its corner

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TOPICS: Tech Industry
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The European Commission has sent a statement of objections to Oracle, highlighting its concerns over the enterprise software giant's takeover of Sun.

Oracle's $7.4bn (£5.1bn) purchase of Sun was announced in April. On Monday, Sun said in a US Securities and Exchange Commission (SEC) filing that it had received a statement of objections from the European Commission, which said the combination of Sun's MySQL with Oracle's enterprise database products could negatively affect competition in the database market.

A spokesperson for EU competition commissioner Neelie Kroes declined to confirm it had sent a statement of objections, saying the Commission did not comment on ongoing merger investigations. However, the SEC filing does reflect comments EU regulators made in September, when they deepened their probe into the Oracle-Sun deal. At that time, the Commission questioned Oracle's incentive to further develop MySQL as an open-source database.

In a merger case, a statement of objections outlines the reasons the Commission believes a deal might breach its competition regulations. The parties involved are invited to respond, and the EU regulators take their arguments into account before reaching a final decision on the legality of the merger. In the Oracle-Sun case, the Commission's final decision is scheduled for 19 January, 2010.

Oracle said the 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," the company said in a statement on Monday. "That is the whole point of open source."

The database giant also argued that its Sun acquisition is "essential for competition in the high-end server market, for revitalising Sparc and Solaris and for strengthening the Java development platform".

Describing the database market as intensely competitive, Oracle suggested that the sector has at least eight strong players, including IBM, Microsoft and Sybase, as well as open-source vendors. It also argued that the Oracle database product is "very different" from MySQL, and that there is no basis in European law for blocking the merger.

"Oracle plans to vigorously oppose the Commission's Statement of Objections as the evidence against the Commission's position is overwhelming," the company said in its statement. "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 US Department of Justice on Monday reiterated the approval it gave to the takeover in August. The department's green light means European regulatory approval is the last hurdle to the purchase.

Topic: Tech Industry

David Meyer

About David Meyer

David Meyer is a freelance technology journalist. He fell into journalism when he realised his musical career wouldn't pay the bills. David's main focus is on communications, as well as internet technologies, regulation and mobile devices.

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