EU chides Oracle over probe of Sun deal

Europe's competition commissioner says Oracle has failed to help address its concerns

Europe's head of competition has criticized Oracle for what she characterized as a lack of cooperation over the investigation of Oracle's planned acquisition of Sun Microsystems, a spokesman for the European Commission said.

In a meeting with Oracle President Safra Catz in Brussels on Wednesday, Competition Commissioner Neelie Kroes "expressed her disappointment that Oracle had failed to produce, despite repeated requests, either hard evidence that there were no competition problems or, alternatively, proposals for a remedy to the competition problems identified by the Commission," a Commission spokesman said.

Kroes said the Commission was willing to move quickly toward a final decision but "underlined that a solution lies in the hands of Oracle," according to the spokesman.

An Oracle spokeswoman said the company declined to comment.

Oracle's proposed $US7.4 billion Sun acquisition was approved by U.S. regulators in August, but two weeks later the Commission announced it would launch an investigation of the deal, citing "serious concerns" about its effects on competition in the database market.

The Commission said it was concerned about Oracle, the world's top seller of database software, taking ownership of MySQL, the leading open-source database, which Sun acquired last year.

Oracle had hoped to complete its acquisition of Sun by now, but the Commission's probe, which could last up to 90 days, has held up the deal and may not be completed until January.

Meanwhile Sun's sales have been declining as rivals IBM and Hewlett-Packard take advantage of the uncertainty around Sun's business with aggressive migration plans. Oracle CEO Larry Ellison said last month that Sun is losing $US100 million a month while it waits for the deal to close.

He has also asserted that Oracle's database competes with Microsoft's SQL Server and IBM's DB2 products, and not with MySQL.

Sun announced a big round of layoffs yesterday, citing the additional time it is taking to close the deal with Oracle. The company said it will lay off 3,000 workers around the world over the next 12 months. Oracle is widely expected to make deeper job cuts if the deal closes.

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James Niccolai

IDG News Service
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