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

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.
Written by Sam Diaz, Inactive on

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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