U.S. Senators Ask EC to Sanction Oracle Buyout of Sun

By Chris Preimesberger  |  Posted 2009-11-25 Print this article Print

Concerned as much about the possible loss of thousands of jobs as the survival of a major U.S. corporation, a group of U.S. senators ask European Commission antitrust regulators to end their investigation of Oracle's acquisition of Sun and simply approve the deal.

You know a business transaction is fairly important when it gets the attention of the U.S. Senate.

Concerned as much about the possible loss of thousands of jobs as the survival of a major U.S. corporation-the long-suffering Sun Microsystems-a bipartisan group of 59 U.S. senators asked European Commission antitrust regulators on Nov. 24 to end their months-long investigation of Oracle's acquisition of Sun and simply approve the deal.

Led by John Kerry, D-Mass., and Orrin Hatch, R-Utah, the senators also requested that the EC provide reasoning for any further delay in making a decision as to why a combined Oracle and Sun shouldn't be able to do business in the 27-nation European Union.

"The EC is within its sovereign rights to set the rules for operation in its market, but with our Department of Justice having made a compelling case that the merger does not pose a threat to competition, it is fair to ask the EC for the basis on which a delay on decision making is warranted and to make a decision one way or the other," Kerry said in a statement to the press.

The EC also set back to Dec. 10 a previously set Nov. 25 date for a hearing in Brussels, in which Oracle was to argue its case to EC commissioners that annexing Sun would not materially affect the world's enterprise parallel database market.

Sun owns the code base and steers the international community of the MySQL database, Oracle's largest open-source competitor. Oracle's primary business is selling and maintaining highly proprietary parallel databases for enterprise IT systems.

EC regulators and open-source stakeholders are concerned about Oracle owning such a popular competing product-MySQL's installed base has been estimated at anywhere between 6 million and 20 million-and possibly slowing down or stopping its development.

CEO Larry Ellison has said several times that MySQL doesn't compete directly with Oracle's proprietary databases. He also said 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.

The EC handed down a formal objection to the sale on Nov. 9. The U.S. Department of Justice, charged with enforcing antitrust laws in the United States, approved the deal last August, four months after the $7.4 billion acquisition deal was announced.

"Some have raised concerns over the company's ability to continue to employ its thousands of workers. Accordingly, we respectfully request the European Commission complete its investigation of this transaction as quickly as possible," the senators said in a letter to Charge d'Affaires Angelos Pangratis, acting head of the delegation of the European Commission to the United States.

On Nov. 20, EC regulators extended the date for their decision on the proposed deal from Jan.19 to Jan. 27, 2010.

John Briggs, an antitrust expert with years of experience in Brussels, told Reuters that pressure from U.S. senators could affect the decision of EC regulators.

Briggs said the senators' action was "a little bit surprising and somewhat regrettable." But, he added, "the reality is that the European Commission will have a hard time ignoring this."

Oracle is investing a serious amount of money and time into this venture, announced April 20, 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.

On Nov. 11, the 20,000-member Independent Oracle Users Group (IOUG) sent a letter to EC Competition Commissioner Neelie Kroes making it clear they also support the sale.


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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