EU issues objections to Oracle's Sun acquisition

The Commission's statement of objections focuses on its concerns about Oracle owning the open-source MySQL database

The European Commission on Monday issued its formal "statement of objections" over Oracle's planned acquisition of Sun Microsystems, saying the deal would harm competition in the database market.

Oracle responded that it would "vigorously oppose" the Commission, saying its position reflects "a profound misunderstanding of both database competition and open source dynamics." The U.S. Department of Justice, which has already approved the deal, also weighed in, saying it studied the deal carefully and concluded that it is "unlikely to be anticompetitive."

The statement of objections was rumored to be imminent last week, and follows the Commission's decision in September to launch an in-depth probe of Oracle's planned Sun acquisition. It is a procedural step in European antitrust investigations that paves the way for Oracle to make a formal response.

"The Statement of Objections sets out the Commission's preliminary assessment regarding, and is limited to, the combination of Sun's open source MySQL database product with Oracle's enterprise database products and its potential negative effects on competition in the market for database products," Sun said in a regulatory filing with the U.S. Securities and Exchange Commission.

The statement of objections is "a preparatory document" and does not necessarily mean the Commission will block the merger, Sun said. It also noted that any final decision can be appealed.

The text of the Commission's objections to Oracle was not released publicly. The Commission is supposed to issue a ruling on the matter by Jan. 19.

Oracle announced its plan to acquire Sun in April for US$7.4 billion. The deal was approved by U.S. competition regulators after a brief review, but the Commission said it was concerned about the effects of the acquisition on Sun's MySQL open-source database, which it acquired last year.

In a foretaste of the arguments it will present to the Commission, Oracle asserted in a statement Monday that the deal "does not threaten to reduce competition in the slightest, including in the database market."

"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," Oracle said.

It characterized the database market as "intensely competitive with at least eight strong players, including IBM, Microsoft, Sybase and three distinct open source vendors."

It also argued that the deal is "essential for competition" in the high-end server market because it would revitalize Sun's Sparc processor and Solaris OS platforms. It would also strengthen the Java development platform, according to Oracle.

"Given the lack of any credible theory or evidence of competitive harm, we are confident we will ultimately obtain unconditional clearance of the transaction," the company said.

Oracle is no stranger to antitrust investigations. The U.S. Department of Justice tried to block Oracle's acquisition of PeopleSoft on the grounds that it would unacceptably contract the enterprise software applications market to two large players, Oracle and SAP.

Oracle won that case in 2004, by convincing U.S. District Court Judge Vaughn Walker that there were many other competitors in that market, albeit smaller ones.

The DOJ issued its own statement Monday explaining its decision to approve the Sun-Oracle deal. It said there are "many open-source and proprietary database competitors" and that there is a large community of open-source developers with expertise in maintaining and improving Sun's open-source software.

"At this point in its process, it appears that the EC holds a different view," the DOJ said. "We remain hopeful that the parties and the EC will reach a speedy resolution that benefits consumers in the Commission's jurisdiction."

Oracle CEO Larry Ellison has said that Sun is losing $100 million per month as it waits for the deal to close.

On Friday Sun released its financial results for the last quarter, ended Sept. 27. Revenue was $2.24 billion, down from $2.99 billion a year earlier. Its losses narrowed to $120 million, from $1.68 billion in the same quarter last year, thanks largely to cost-cutting efforts.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Mergers and acquisitionsOracleeuSun Mircosystems

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

James Niccolai

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Bitdefender 2019

This Holiday Season, protect yourself and your loved ones with the best. Buy now for Holiday Savings!

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?