Mr. Ellison Asks That His Burgers Be Served With Freedom Fries Until Further Notice
Approved without incident by Sun shareholders in July and the U.S. Justice Department in August, Oracle’s planned $7.4 billion acquisition of Sun Microsystems seemed poised to easily pass muster with European regulators as well. Sadly for Oracle, that’s not how things have played out. Citing “serious concerns” about the deal’s effect on competition in the market for databases, the European Commission has opened an in-depth investigation into it.
“The Commission has to examine very carefully the effects on competition in Europe when the world’s leading proprietary database company proposes to take over the world’s leading open source database company,” said Competition Commissioner Neelie Kroes. “In particular, the Commission has an obligation to ensure that customers would not face reduced choice or higher prices as a result of this takeover.”
In short, the Commission’s concern is with Sun’s open-source database, MySQL, and Oracle’s plans for it. A preliminary market investigation has shown “that the Oracle databases and Sun’s MySQL compete directly in many sectors of the database market and that MySQL is widely expected to represent a greater competitive constraint as it becomes increasingly functional,” the Commission explained. The “investigation has also shown that the open source nature of Sun’s MySQL might not eliminate fully the potential for anti-competitive effects.” So the Commission will dig a bit deeper to determine just how much incentive Oracle has to further develop MySQL as an open-source database.
A tough break for Oracle (ORCL), which now has to suffer through an EC probe scheduled to last until Jan. 19, one that increases the chances the company may have to divest some features of Sun’s (JAVA) business to get the deal done.