EC Might Lodge 'Formal Objection' to Oracle Acquisition of Sun

 
 
By Chris Preimesberger  |  Posted 2009-11-05 Email Print this article Print
 
 
 
 
 
 
 

The European Commission, the antitrust arm of the 27-nation European Union, apparently will lodge the objection because the deal includes the freely available and popular MySQL Web database, and the EC sees a major conflict of interest in the world's largest commercial database company owning its largest open-source competitor.

Two prominent European business publications, the U.K.'s Financial Times and Germany's Handlesblatt, reported Nov. 4 that a so-called "formal objection" to the proposed Oracle acquisition of Sun Microsystems soon may be forthcoming from the European Commission.

The EC, the antitrust arm of the 27-nation European Union, apparently will lodge the objection because the deal includes the freely available and popular MySQL Web database, and the EC sees a conflict of interest in the world's largest commercial database company owning its largest open-source competitor.

Oracle CEO and founder Larry Ellison doesn't see it this way, saying at the recent Oracle OpenWorld conference in San Francisco: "MySQL in no way competes with our databases. It has its own market and following. The main competitor is Microsoft [SQL Server], and that's OK by us."

MySQL was bought by Sun in January 2008 for $1 billion and is ticketed to become part of Oracle, the world's largest commercial database maker and merchant. Some-but not all-MySQL stakeholders also cite the conflict of interest here, and that's what the EC's objection is all about.

If a formal objection indeed is lodged by the EC, then the acquisition process takes longer, more time and money are lost forever, and more jobs are liquidated at Sun, which has been cutting staff continuously for a few years.

Oracle still will be free to appeal any such objection immediately.

Oracle is investing $7.4 billion into this venture, which would immediately transform the Redwood City, Calif.-based enterprise database and middleware company into one of the world's top 10 IT systems providers. Meanwhile, Ellison claims Sun is losing $100 million and thousands of jobs a month as customers old and new put sales on hold until they find out the fate of the company: Will it go to Oracle, or not?

The EC holds a great deal of power here. Oracle does business in just about every EU nation and stands to lose a huge amount of business if the EC does not bless the deal.

The U.S. Department of Justice, which enforces antitrust laws in its own vast jurisdiction, sanctioned the transaction three months ago, but that hasn't soothed the minds of EC Competition Commissioner Neelie Kroes and some of her fellow commissioners about the future of MySQL, the freely available and popular database for Websites that companies such as Facebook, Google and Yahoo use to run their businesses.

MySQL is a European creation, one of the most successful in recent IT history. Kroes and the EC do not want a commercial database company-Oracle-owning its largest open-source competitor.

Kroes has said several times she needs to see proof that MySQL can continue to develop and be innovative under Oracle's ownership. Oracle, she said, has yet to provide that.

The EC has set a date of Jan. 19, 2010, to make a final decision whether to sanction the deal, although a determination could come sooner than that.



 
 
 
 
Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on Salesforce.com and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz
 
 
 
 
 
 
 

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