Oracle, Sun Will Face New EC Antitrust Official

By Chris Preimesberger  |  Posted 2009-11-30

By the time a decision is made about whether a combined Oracle and Sun Microsystems corporation can do business in the 27 European Union countries, a new official will be serving as the chief antitrust watchdog at the European Commission.

The EC said Nov. 30 that Neelie Kroes, the commission's hard-nosed competition commissioner for the last five years, will be assigned to a new job when her term in the antitrust office expires in mid-January. Kroes has been on the Forbes magazine list of the world's 50 most powerful women for several years.

The commission, which is the law enforcement body of the European Union, is due to make a decision on whether to sanction Oracle's $7.4 billion acquisition of Sun on Jan. 27, 2010, so Oracle can continue to do business in Europe.

Oracle will have an opportunity Dec. 10 to argue to EC commissioners that annexing Sun would not materially affect the world's enterprise parallel database market. Confirmation about the hearing is expected on Dec. 4. Sun owns the code base and steers the international community of the MySQL database, Oracle's largest open-source competitor.

MySQL is a European-born database that is an important ingredient in running enterprise Websites.

Kroes and other EC regulators 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.

Kroes Kicked Upstairs at the EC

Kroes will become a vice president of the EC and also oversee the European Network and Information Security Agency as digital agenda commissioner. The DAC is responsible for overseeing improvement in online access to educational content.

However, she will still have influence on the EC's decision on the Oracle-Sun transaction, a source close to the situation told eWEEK.

To replace Kroes, EC President Jos??« Manuel Barroso has selected Joach??ín Almunia, the current commissioner for Economic and Monetary Affairs.

Almunia was the Socialist party candidate for prime minister in Spain in 2000. He is expected to maintain the EC's current crackdown on cartels, monopolies and illegal foreign aid when he succeeds Kroes in January.

In her five years as competition commissioner, Kroes has proved she has little fear of major corporations. She not only has been a tough regulator against Oracle and Sun, but also of Microsoft and Intel.

Kroes worked on compliance issues but did not supervise the EU's antitrust investigation into Microsoft, which resulted in the world's largest software company being hit with a fine of 497 million euros ($631 million) in 2004. Her office was also responsible for an investigation into Intel that resulted in a $1.45 billion fine in August 2009. That decision is under appeal.

Observers close to the situation contacted by eWEEK believe that the EC's steadfast position against the acquisition will not change with a new official in place.

"Does it make any difference whether she [Kroes] is there [in the antitrust office, at the time of the decision]? No," Robert McLeod, founder and editor-in-chief of Mlex, a market intelligence consultancy that advises various stakeholders on international regulatory matters, told eWEEK.

"In each of the last three changes [of commissioners], including this one, they've had a controversial decision [to make] that has gone over to the next commissioner; they take the file from the previous commissioner, and they just stamp it. [A change] wouldn't happen, it couldn't happen; there's no precedent for this," McLeod said.

There has never been a veto of a competition commissioner's decision in the 40 years, because the post has its own mandate under the treaties that make up the EC, McLeod said.

"This case is in a very advanced stage and will be even more so at the end of January," open-source activist and former MySQL investor and business adviser Florian Mueller told eWEEK.

"The new competition commissioner is very reputable, and Mrs. Kroes is still going to be around," Mueller said. "It's the most usual thing for commissioners to be assigned to new areas of responsibility for their second term. Getting a second term at all is a major accomplishment. The president of the commission stays and is the strongest in a long time. All in all, [there is] a great deal of continuity."

Editor's note: This story has been updated and corrected to include new information about the powers of the Competition Commissioner, Kroes' involvement with the Microsoft case, and that Oracle has the opportunity -- but not a contracted date -- on Dec. 10 with the EC.

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