Some initial reactions to the proposal, which was pre-announced at the DLD conference in Munich and then published on Wednesday, were harshly critical.

Writer Jeff Jarvis was armed and ready to rebut European Commissioner Viviane Reding’s opening address on “the right to be forgotten” at DLD, having criticized her data protection stance in his new book “Public Parts.”

“I very much fear Reding’s ‘right to be forgotten’ and its impact [on] free speech and the right to know,” Jarvis wrote.

A European Microsoft executive was also quick with the skepticism. “We have been pushing for harmonisation of privacy laws for several years, but we are concerned that these proposals may be too prescriptive,” Ron Zink, who is Microsoft Europe’s chief operating officer and associate general counsel, told the Financial Times.

Analysts and industry groups called Reding’s ideas “draconian,” “prescriptive,” “onerous” and expensive.

But now that Reding has formally proposed her legislation, Web companies seemed more measured in their response. Though they didn’t endorse the bill, they seemed willing to work with it. Of course, they’d prefer to avoid walking into fines of up to two percent of their revenue.

In statements emailed to AllThingsD, Google asked for a “simple” solution, while Facebook continued to talk up its positive impact on European jobs.

Said Google: “We support simplifying privacy rules in Europe to both protect consumers online and stimulate economic growth. It is possible to have simple rules that do both. We look forward to debating the proposals over the coming months.”

A Google executive at a conference in Brussels further questioned how, exactly, third-party sites could be responsible for deleting all instances of data online after it had been posted.

Here’s Facebook’s extended statement:

The revision of Europe’s Data Protection framework is an important opportunity to develop regulation that both protects privacy and supports the creation and growth of modern services over the global Internet. We welcome the move towards more harmonization of Data Protection laws in the EU which will help create legal certainty and confidence for companies to operate.

We agree with the recent statements made by Commissioner Reding that the new regulation should foster growth and job creation. Services like Facebook already contribute significantly to economic activity in the EU and can be a major driver of growth and new jobs in the future.

We will continue to work closely with politicians and regulators in the EU in order to share our experience and expertise and contribute to achieving sound privacy regulation and a thriving digital sector.

Reputation.com CEO Michael Fertik, whose company offers what could be seen as “the right to be forgotten” as a paid service to customers, said he didn’t necessarily support Reding’s proposal but he disapproved of industry hysteria around regulation of the Internet.

“I think that light regulation is often a stimulant to innovation,” Fertik said.

“Right now the absence of law supports the incumbents of the Internet, which are advertising businesses,” he added. “But what’s bad for Facebook today may be good for a thousand companies tomorrow. The biggest promise of the right to be forgotten is it’s going to enhance the trust of the Internet, which could be a boon to e-commerce.”

As for some other major Web companies in the business of identity and user-generated content, Twitter declined to comment on EU data protection policy, while Tumblr — which had been especially active in fighting SOPA — did not respond to a request for comment.

Meanwhile, U.S. lawmakers on Thursday expressed concerns about Google’s new unified privacy policy.

A press release from the European Commission doesn’t provide much detail into the probe, which will look at Apple along with Lagardère Publishing’s Hachette Livre, News Corp.’s HarperCollins, CBS’s Simon & Schuster, Pearson’s Penguin and Germany’s Verlagsgruppe Georg von Holtzbrinck (News Corp. also owns this Web site).

The EU says it will “investigate whether these publishing groups and Apple have engaged in illegal agreements or practices that would have the object or the effect of restricting competition.”

It also says it will look at the “agency” pricing agreements that Apple pushed through when it introduced the iPad back in 2010. Those deals allow publishers to set the retail price of their books, and give retailers like Apple’s iTunes a set percentage of the transaction.

The previous wholesale model, championed by Amazon, allowed retailers to set the price of books. After a series of high-profile negotiations, Amazon has moved to the agency model as well; the e-commerce giant still dominates the e-book market.

“In the area of consumer communications, the investigation found that the parties’ activities mainly overlap for video communications, where Microsoft is active through its Windows Live Messenger,” the commission said in a statement.

“However, the Commission considers that there are no competition concerns in this growing market where numerous players, including Google, are present.”

Read the rest of this post on the original site »

A Dutch court has ordered an injunction against sales of Samsung’s Galaxy S, Galaxy S II and Ace smartphones across the European Union, after determining the devices violate an Apple software patent entitled “Portable Electronic Device for Photo Management.”

The order, which applies in the Netherlands and any EU country where the patent is registered, will take effect in seven weeks — sometime in mid-October. And when it does, it could prove a logistical nightmare for Samsung, which moves a lot of its European merchandise through the port of Rotterdam.

Doesn’t bode well for Google’s Android OS, either.

“Regardless of how Samsung may be able to work around this decision in Europe, it’s a severe blow for Android,” Florian Mueller writes over at FOSS Patents. “In all likelihood, the winning patent is infringed by Android itself — probably not the operating system per se, but by one or more of the applications that ship with Android and without which the usefulness of Android would be impaired in one particular area (photo viewing). Apple now has the first enforceable court decision in its hand (out of many lawsuits going on around the world) that finds Android to infringe an Apple patent.”

UPDATE:

Samsung, for its part, doesn’t seem too worried about the ruling or the embargo, which it is evidently prepared to work around.

“Today’s ruling is an affirmation that the Galaxy range of products is innovative and distinctive,” the company said in a statement. “With regard to the single infringement cited in the ruling, we will take all possible measures including legal action to ensure that there is no disruption in the availability of our Galaxy smartphones to Dutch consumers. This ruling is not expected to affect sales in other European markets.”

Bloomberg reports that European Union data-protection regulators say they will investigate the photo-tagging feature. The Article 29 Data Protection Working Party, which advises national data protection agencies that could then potentially establish punishments, will evaluate whether the feature breaks privacy rules, according to member Gerard Lommel’s comments to Bloomberg.

Facebook, which calls the feature “Tag Suggestions,” admitted it messed up at least a little bit, telling various news outlets “we should have been more clear with people during the roll-out process when this became available to them.”

Tag Suggestions are “now available in most countries,” according to a Facebook blog post yesterday, which said Facebook users tag more than 100 million photos per day.

The company said facial recognition is meant to address user complaints that tagging photos can become a chore, especially in large albums that depict the same people over and over again.

Facial recognition is one of the touchiest subjects in online privacy, with Google Executive Chairman (and former CEO) Eric Schmidt saying publicly, most recently at D9, that mobile facial recognition is something he personally worked to stop at Google, even after it had already been developed. Apple last year bought a facial recognition company called Polar Rose.

Please see the disclosure about Facebook in my ethics statement.

However, many EU countries have yet to create laws based on the directive, which was originally legislated in 2009, and it’s not clear how aggressively various governments will enforce opt-in cookies.

“Confusion and uncertainty” is how Dennis Dayman, chief privacy and security for Eloqua–a marketing automation provider that’s supplying tools to help Web sites offer data capture choices–described the situation. He noted that what makes things even harder is that requirements will vary from country to country.

“Do-Not-Track” laws, which would require options for consumers to opt out of online data collection, are also being discussed in the United States. Sen. Jay Rockefeller (D., W.Va.) this month proposed the Do-Not-Track Online Act of 2011, which would be enforced by the Federal Trade Commission if it passes.

California State Sen. Alan Lowenthal proposed a similar law in California earlier this year. Google, Facebook, AOL, Yahoo and various advertising and retail companies have submitted formal opposition to the California bill, arguing that all four major browsers already offer users options to filter their own Web use.

Image via Flickr user melissacorey.

Meted out after it was determined that Microsoft had failed to comply with a 2004 antitrust judgement that required the company to charge reasonable rates for its interoperability protocols, the $1.26 billion fine was the largest ever imposed by the EU against a single company, the first to be issued for noncompliance with a court order and, in Microsoft’s opinion, “unnecessary, unlawful and totally disproportionate.”

“This case would not have arisen if the commission had been as explicit with respect to rates which it wanted Microsoft to charge as it had been with all other terms of licensing proposed by Microsoft,” Jean-François Bellis, Microsoft’s attorney told the EU General Court. “How can the commission fine Microsoft for failing to apply reasonable rates from June 2006 to October 2007 when the final parameters were only determined on October 22, 2007?”

In other words, it’s the commission’s fault the fine was so high, because it didn’t give Microsoft the information it needed to avoid it in the first place.

Interesting argument, though it seems doubtful it will carry much weight with a court when, according to commission lawyers, Microsoft is on record claiming it understood what reasonable rates were.

The European Union’s antitrust regulator has privately expressed concerns during its preliminary review of the deal, which could prompt the regulator to submit the deal to a lengthy examination, people familiar with the matter said.
A key focus of the European review, these people said, is Intel’s stated desire to incorporate security features into its widely used microprocessor chips. The EU appears concerned that if McAfee, by virtue of being owned by Intel, had privileged access to those features, it could be difficult for McAfee’s rivals to compete, they added.

Read the rest of this post on the original site

The commission received complaints from other Internet search providers that Google abused its dominant market position by allegedly placing their services lower in results rankings, while Google’s own services were given preferential placing.

Read the rest of this post on the original site »

Seeking to be a leader in protecting online privacy, the European Union last year passed a law requiring companies to obtain consent from Web users when tracking files such as cookies are placed on users’ computers. Enactment awaits action by member countries.
Now, Internet companies, advertisers, lawmakers, privacy advocates and EU member nations can’t agree on the law’s meaning. Is it sufficient if users agree to cookies when setting up Web browsers? Is an industry-backed plan acceptable that would let users see—and opt out of—data collected about them? Must placing cookies on a machine depend on the user checking a box each time?

The answers are mired in bickering.
“We’re now in a sort of no man’s land,” says Bridget Treacy, head of the U.K. privacy practice at law firm Hunton & Williams LLP.

Read the rest of this post on the original site

The agency also closed a second investigation into Apple’s repair policies, which required iPhone warranty service to be performed in the country in which the device was purchased. Now that the company is offering cross-border iPhone warranty service, there’s no need to pursue that investigation any further, either.

Under those rules, search engines must anonymize user data after six months. And while most search engines have reduced their data retention periods, none have truly complied with EU regulations. Google (GOOG) keeps user data for nine months. Microsoft (MSFT) keeps it for six, but holds on to software cookies and whatnot for a year beyond that. And Yahoo (YHOO) eliminates user data after 90 days, but only partially.

“On behalf of the data protection authorities in the EU united in WP29, I call on you to improve the protection of the online privacy of users of your search engine services,” the Article 29 Data Protection Working Party said in its letters.

“Besides limiting the retention period of personal data,” the letters continue, “measures include a reduction of the possibility to identify users in the search logs and the creation of an external audit process to reassure users that you are delivering on your privacy promises, i.e. by involving an independent and external auditing entity.”

Regulators had a particularly stern rebuke for Google, whose privacy practices have come under intense scrutiny this month after the company admitted its Street View cars had been–heh heh–“inadvertently” collecting and storing payload data from unsecured private Wi-Fi networks for three years.

“Considering Google’s dominant position in almost every EU member state, with a market share of up to 95 percent in some national search engine markets, the company has a significant role in European citizens’ daily lives,” the regulators wrote. “The company’s apparent lack of focus in data retention is concerning.”

There was this from the Progress & Freedom Foundation: “By giving users powerful new tools to further protect their privacy, Facebook has employed a potent weapon to deal with marketplace apprehensions: self-regulation.”

This from Democratic Senator Charles Schumer of New York: “Facebook has heard the call of its users and realizes that much greater privacy protections are needed. This is a significant first step that Facebook deserves credit for.”

This from the ACLU: “After months of privacy-failing moves, Facebook is finally friending privacy again….While it’s true that users have more control than they did yesterday, there are still important steps that must be taken.”

And, finally, this from the Electronic Frontier Foundation: “The changes are pretty good, though more is needed.”

Consensus, then, seems to be that the privacy settings Facebook introduced today are an improvement over the old. That said, it’s important to remember that the old were sorely lacking, that the new were introduced under duress and that they DON’T do one thing that critics have been clamoring for: Make the highest privacy settings the default.

Which is really pretty weak, when you think about it, as Jeffrey Chester at the Center for Digital Democracy notes:

Facebook made some positive changes today, but only because of political pressure from policymakers and privacy advocates on both sides of the Atlantic. Mr. Zuckerberg’s failure to acknowledge the political realities don’t bode well for Facebook’s future approach to privacy: he appears to be living a Alice in Digital Wonderland fantasy, where he only makes changes on privacy because he has the goodwill of its users in mind. Just last December 9, after all, Facebook made one of its typical self-reverential announcements that it was “rolling out easy-to-use tools to empower people to personalize control over their information.” These changes triggered a user revolt, letters from Senators, an opinion ordering a reversal from the EU, and concern from the FTC.

The European Court of Justice in Luxembourg ruled that Google is not liable for trademark infringement when it sells ads linked to keyword searches for a brand to one of the brand’s competitors.

The court argued that the search giant is merely a host for ads, and turned down a lawsuit brought by luxury-goods group LVMH Moët Hennessy Louis Vuitton SA. The court concluded that it is an advertiser’s responsibility to make clear if the product it is selling is different from the brand keyword typed in by the consumer.

Read the rest of this post on the original site

Today, it’s Sun co-founder Scott McNealy who is bidding farewell. Sources close to the company tell me that he too will leave Sun following the close of Oracle’s $7.4 billion buyout.

Word of McNealy’s fate comes a day before Oracle is to unveil its strategy for Oracle (ORCL) and Sun (JAVA) at an event tomorrow.

McNealy’s farewell memo to employees, below.

Gang,

When I interviewed many of you for employment at Sun over the years, one commitment often made was that things will change above, below, and around you faster than any place you have ever been. Looks like this was one area we exceeded plan for 28 years. While it was never the primary vision to be acquired by Oracle, it was always an interesting option. And this huge event is upon us now. Let’s all embrace it with all of the enthusiasm and class and talent that we have to offer.

This combination has the potential to put Sun, its people, and its technology at the center of yet another industry and game changing inflection point. The opportunity is well documented and articulated by Larry and the Oracle folks. Not much I can add on this score. This is a very powerful merger. And way better than some of the alternatives we were facing.

So what do I say to all of you now this is happening?

It turns out that one simple message to the large and diverse Sun community is actually quite hard to craft. Even for a big mouth who is always ready with a clever quip. The community includes our resellers and customers, our current and former employees, their friends and families who supported our employees on their mission to change the industry, our investors, our supply and service partners, students and educators, and even our competitors with whom we often collaborated.

But let me try. Though nothing I could write comes close to matching the unbelievably strong and positive emotions I have for you all. See, I never was able to master dispassion. I truly loved starting, running, and living Sun. And the last four years have not been without serious withdrawal. And the EU approval rocked me more than it should have.

So, to be honest, this is not a note this founder wants to write. Sun in my mind should have been the great and surviving consolidator. But I love the market economy and capitalism more than I love my company.

And I sure “hope” America regains its love affair with capitalism. And except for the auto industry, financial industry, health care, and some other places (I digress), the invisible hand is doing its thing quite efficiently. So I am more than willing to accept this outcome.

And my hat is off to one of the greatest capitalists I have ever met, Larry Ellison. He will do well with the assets that Sun brings to Oracle.

What we did right and wrong at Sun over the years might make for interesting reading. However, I am not a book writer. I am a husband, father of four, and a builder and leader of people who want to make a difference.

But spare me a bit of nostalgia. Not of the mistakes we made, and lord knows I made a ton. But of the things we did right and well.

First and foremost, Sun innovated like crazy. We took it to the limit (see Eagles). And though we did not monetize our inventions as well as we could have, few companies have the track record in R&D that we had over the last 28 years. This made working at Sun really cool. Thanks to all of you inventors and risk takers who changed how we live.

Sun cared about its customers. Even more than we cared about our own company at times. We looked at our customer’s mission as more important than ours. Maybe we should have asked for more revenue in return, but our employees were always ready to help first. I love this about Sun which I guess makes me a good capitalist if not a great capitalist.

Sun did not cheat, lie, or break the rule of law or decency. While we enjoyed breaking the rules of conventional wisdom and archaic business practice and for sure loved to win in the market, we did so with a solid reputation for integrity. Nearly three decades of competing without a notable incident of our folks going off course morally or legally. Not all executives and big companies are bad. Really. There are good companies out there. Special thanks to all of my employees for this. I never had to hide the newspaper in shame from my children.

Sun was a financial success. We paid billions in taxes, salaries, purchases, leases, training, and even lawyers and accountants for devastatingly cumbersome SOX and legal compliance (oops, more classic digression). Long term and smart investors made billions in SUNW. And our customers generated revenue and savings using our equipment in countless ways. Many employees started families, bought homes and put them through school while working at Sun. Our revenues over 28 years exceeded $200B. Few companies make it to the F200. We did. Nice.

Sun employees had way more fun than any other company. By far. From our dress code (“You must!”) to beer busts to our April Fools pranks to SunRise to our quiet enjoyment at night of a long hard well done day of work, no company enjoyed “work” more than Sun. Thanks to all of our employees past and present for making Sun such a blast.

I could go on for a long time reminiscing about the good and great stuff we did at Sun, but just allow me one last one. We shared. Not the greatest attribute for a capitalist. But one I could not change and was not willing to change about Sun while I was in charge. We shared in the success of Sun with our resellers. With our employees through stock options, SunShare, beer busts, and the like (for as long as Congress would allow) and through our efforts to keep as many of them on board for as long as possible during the inevitable down cycles. With our partners through the Java Community Process, through our open source collaborations, and licensing strategies. With our customers through our commitments to low barriers to exit. Sun was never just about us. It was about we. And that may be a bit of the reason we are where we are today.

But I have few regrets (see Sinatra’s “My Way”) and will always look back at Sun and its gang with only pride. Enormous pride. You are the best this industry ever had though few outside of Sun recognized it.

And what we are about will live on in Sparc, Solaris, Java, our products, and our spirit. Well past everyone’s recollections of what we did together. I will never forget though.

Oracle is getting a crown jewel of the technology industry. They will do great things with Sun. Do your best to support them and keep the Sun spirit alive and well in the industry. Our children will be better for it.

Thanks for the off the charts support to everyone who ever carried a Sun badge, used our products, or helped our company through the years.

And thanks to my wonderful wife, Susan, who gave this desperado (see Eagles) a chance to choose the Queen of Hearts before it was too late.

Someday, hopefully, you will all get to see or meet her and my other life’s works named Maverick, Dakota, Colt, and Scout. If you do, perhaps you will understand why I stepped back from the CEO role four years ago. And why I feel like the luckiest guy in the whole world.

My best to all of you, and remember: Kick butt and have fun!

Scott

FURTHER READING:

• Sun CEO Set to Resign
• Sun CEO: Go Oracle, Beat IBM [Internal Memo]
• EU Approves Oracle-Sun Deal
• EU Poised to Approve Oracle-Sun Deal
• Oracle Sack Half of Sun’s Workforce? Ridiculous, Says Sun.
• Q: What’s the Difference Between Neelie Kroes and Larry Ellison?
• Ellison: Oracle Is the New IBM
• Oracle: IBM, Come Out to Play-ee-ay
• Mr. Ellison Asks That His Burgers Be Served With Freedom Fries Until Further Notice

We’ve all seen it, that spiro-graphed, color-splotched invitation to Apple’s Jan. 27 event at the Yerba Buena Center in San Francisco. Weekend Update isn’t on the inside, but we hear rumors that Jobs will storm the stage dressed as Moses, carrying the new tablet, which will be made of stone, under his robes. Apparently, that’s where it’s been hiding all along. Either that, or Weekend Update is going a little nuts from “tablet fatigue.”

Before we got to rumors, plans and all important educated guesses, AllThingsD spent the week doing reporting about real companies with products you can actually buy.

Walt’s column wasn’t exactly its normal, gadgety self this week. Maybe he’s saving his strength. Instead of the newest thing that won’t be leaving your pocket, he covered a service that claims to help you remember everything. Evernote, with its adorable little elephant logo, aims to be a sort of digital filing cabinet in the cloud, allowing you to save information, images, notes and just about anything else that can be digitized. Walt had good things to say all around, even if the available apps didn’t give every device the same functionality. Weekend Update liked the auto text-recognition feature that makes pictures of text searchable. We’ll never carry a business card home again. Neither rain nor snow nor tablet rumors can keep Walt from his appointed rounds at Mossberg’s Mailbox, and this week he grabbed a couple questions about e-readers, Microsoft’s (MSFT) Internet Explorer 8 and the right laptop for the young and litigious. Walt cleared up the myth that e-books can’t highlight text (even if they don’t do it in color yet), and then moved on to a question about what IE8 refers to as “accelerators.” Before tying up the mailbag strings for anther week, he also gave counsel to a future counselor. He recommended a moderately priced Windows 7 laptop or a Macbook for the incoming law student, though he suggested it would be a good idea to check with the school and current students for specific needs. Weekend Update thinks that last bit is extra good advice. Katie was busy this week testing the latest Bluetooth earpiece from Aliph’s Jawbone line. The Jawbone Icon is the first earpiece to run with a software package that allows the addition of apps just for the earpiece. Overall Katie thought the Icon represented a step forward for Bluetooth earpieces but hopes for upgrades to the app suite will bring more robust features. Oh yeah, and she was glad that they finally got rid of those tricky hidden control buttons.

At MediaMemo, Peter gave us the continued saga of e-magazines and the world’s slowest moving electronic construction project. It looks like the Time Inc. e-mag prototypes won’t be part of Wednesday’s Apple (AAPL) event even though there was a lot of hullabaloo over the company’s Sports Illustrated prototype. Condé Nast, on the other hand, has declared its GQ mag-as-app tests a success. No word yet on who will be three-quarters naked on the first 10-inch screen edition. Completing the out-with-the-print, in-with-the-electronic trifecta was Peter’s post about the New York Times pay-wall announcement. The Times claims it will erect a metered wall in 2011, which seems like an awfully long time in the shifting sands of the Web. Outside partners may be playing a factor, and some speculate that the 2011 date is just a declaration that New York Times Company (NYT) will be waiting-and-seeing. Peter doesn’t see what that would accomplish and cites experts who assert that a year isn’t an unreasonable amount of time to build a complex pay wall with necessary features.

Digital Daily was on the ball this week with John’s signature hard-hitting hilarity. His early report proved correct when sources suggested that the EU’s approval of the pending Oracle (ORCL)-Sun (JAVA) acquisition was nigh. Not to leave the tablet news out in the cold, John asked some important questions about a future tablet’s data consumption habits, and thinks it might end up in a class of its own. A big, beautiful screen means big, beautiful images and video, which mean gloriously huge file sizes. Hooray for Wi-Fi. To round out the week, John covered a story about Google (GOOG) co-founders Larry and Sergey planning to sell about $5.5 billion in stock over five years. We’re not sure whether the proper term is “cashing out” or “cashing in,” but they are going to be doing a lot of one or the other. The stock sale will remove them as a two-man majority voting block, but their remaining 47 percent will assure that their velvety duet will continue to ring clearly at board meetings.

Boomtown led off with some viral video for the ages. Jimmy Fallon one-upped the “pants on the ground” video by performing the sarcastic ballad as Neil Young. We’re not sure the audience caught that it was Jimmy right way, in part, because Young was making the TV rounds about that time, and in part, because Fallon does a surprisingly good Neal impression. Kara asked her readers to vote on the new tablet’s name, making “iPad” her own prediction. Kara has an eerie way of getting this stuff right so Weekend Update is gonna go ahead and get that tattoo this weekend. Kara finished the week with a quick post about her trip to Sundance and all the geektastic happenings there. Kara’s Winnebago, which we call “Operation Rolling Thunder,” was crammed full of wife, kids, mom, dog, and maybe a few stowaway Bay Area indie filmmakers who tied themselves to the undercarriage. Read the post; there’s never a dull moment on a Swisher expedition.

AllTingsD is back on Monday with some great new stuff to feed that techie habit. And don’t forget to set your homepages here Tuesday (as if they weren’t already) to see live photos and blogging from Apple’s big unveiling. We’ll see you there, and will be sure to let you know if Jobs does, in fact, part the Bay in his walk from Marin to San Francisco that morning.

Believe it or not, it’s been more than nine months since Oracle first announced their intent to acquire Sun in April, 2009. And the ‘interim’ period has been tough on everyone–on our employees, and our partners and customers. Thankfully, that interim period is coming to an end, with regulatory approval from the European Union issued today, and only a few hurdles remaining–before Oracle formally expands beyond software to become the world’s most important systems company.

Even though we’re not quite across the finish line, I wanted to leave you with a few final thoughts.

All in all, it’s been an honor and privilege to work together. In my more than twenty years in the industry, the last thirteen at Sun, I’ve had a chance to work with and around an enormous diversity of companies, from every sector you can imagine. I can say with conviction that Sun’s people have always stood apart as the brightest, most passionate, and most inspiring. I’ve never had a bad day in my thirteen years for one very basic reason–I’ve always been surrounded by the best and brightest individuals I’ve ever come across. That’s been an honor and privilege, for which I’m enormously thankful.

Technology from Sun, alongside our employees and partners, have changed the world. We’ve opened markets, elections and economies. We’ve helped build the world’s most important and valuable businesses. We’ve played a key role in discovering new drugs, in bringing education and healthcare to those in need, and supplying the world with an incredible spectrum of entertainment, from smartphones to social networking. I doubt any company has had such a significant influence over the way we see or experience the world. I once told Scott McNealy he was the Henry Ford of the technology industry, making remarkable innovations accessible to anyone, and creating an immense number of jobs around the globe for those that made use of them. I can’t begin to tell you how proud I am of my association with that cause and the people behind it, and the value we created for ourselves and those that exploited our innovations.

I also know we’ve had more than our share of very tough challenges. Amidst the toughest market and customer situations imaginable, I’m proud we’ve always acted with integrity, with a sense for what’s right, and not simply what’s expedient. Over the years, I’ve heard time and again, from those inside and outside the company, “I like and I trust Sun.” 

Building that good will is something to which you’ve all contributed. And you have every right to be very proud of it.

Make no mistake, it’s been an enormous asset.

So, to the sales and SE teams across the world who continually give their all to bring the numbers home–thank you for the trust you’ve built with customers, and the results you’ve delivered. I hope you’re prepared to have the wind at your back, you deserve it.

To the service professionals who every day build, maintain and run the world’s most important data centers–thank you for your excellence and discipline, 7×24.

To the professionals who run the functions and processes that are the company’s spinal column–thank you, we’d be paralyzed without you.

And lastly – to the engineers and marketers who’ve fostered a perpetual belief that innovation creates its own opportunity – thank you. You’re right. Innovation does create its own opportunity. Like Oracle, we’re an engineering company in our heart and soul, our potential together is limitless.

Now many of you know that I came to Sun when a company I helped to found was acquired in 1996. I’ve also led, and been a part of many, many acquisitions at Sun, both large and small. From those experiences, I’ve learned one very clear lesson–the single most important driver of a successful acquisition are the people involved–and how committed they are to the new owner’s mission.

And the most effective mechanism I’ve seen for driving that commitment begins with a simple, but emotionally difficult step. 

Upon change in control, every employee needs to emotionally resign from Sun. Go home, light a candle, and let go of the expectations and assumptions that defined Sun as a workplace. Honor and remember them, but let them go.

For those that ultimately won’t become a part of Oracle, this will be the first step in a new adventure. Sun has a tremendous reputation across the planet, well beyond Silicon Valley. It’s a great brand to have on your resume. We’re known as self-starters, capable of ethically managing through complexity and change, for delivering when called upon, and for inventing and building the future. With the world economy stabilizing, I’m very confident you’ll land on your feet. You’re a talented, tenacious group, and there’s always opportunity for great people.

For those that have roles at Oracle, may you start with a clean slate, ready to take on the myriad opportunities ahead. With the same passion and tenacity for Oracle’s success that you’ve had for Sun’s, and a renewed sense of energy around executing on a far broader mission. There is no doubt in my mind you, and Oracle, will be remarkably successful, beyond the market’s wildest expectations. But it’s important you come to work thinking, “Sun is a brand, Oracle’s my company.” Don’t look for ways to preserve or dwell in “how we used to do things.” Look for ways to help customers, grow the market, and improve Oracle’s performance. 

Sun is a brand, Oracle is your company.

And to that end, with nine months of getting to know them, I’ve found Oracle to be truly remarkable, led by remarkable people. From Larry on down, they understand the enormity of the opportunity before them, and they’re more than prepared to execute on it – across the board. I’ve seen their commitment and focus, now they need yours. I’m confident you’ll give it the 10,000% effort it deserves–and we’ll all see the end result.

So thank you, again, for the privilege and honor of working together. The internet’s made the world a far smaller place–so I’m sure we’ll be bumping into one another. 

Go Oracle!

Jonathan

FURTHER READING:

• Departing Sun Co-Founder to Employees: Kick Butt and Have Fun!
• Sun CEO Set to Resign
• EU Approves Oracle-Sun Deal
• EU Poised to Approve Oracle-Sun Deal
• Oracle Sack Half of Sun’s Workforce? Ridiculous, Says Sun.
• Q: What’s the Difference Between Neelie Kroes and Larry Ellison?
• Ellison: Oracle Is the New IBM
• Oracle: IBM, Come Out to Play-ee-ay
• Mr. Ellison Asks That His Burgers Be Served With Freedom Fries Until Further Notice

[Image credit: igrec /Fllickr]

The European Commission this morning unconditionally approved Oracle’s proposed acquisition of Sun Microsystems, removing one of the last hurdles to the $7.4 billion deal. Digital Daily reported Monday that people close to the companies expected the EC to clear the deal by today.

“I am now satisfied that competition and innovation will be preserved on all the markets concerned,” European Competition Commissioner Neelie Kroes said in a statement. “Oracle’s acquisition of Sun has the potential to revitalize important assets and create new and innovative products.”

All that remains in the planned merger’s way now is approval from Chinese and Russian antitrust authorities, and Oracle (ORCL) expects them both to clear it unconditionally. That being the case, the company has scheduled an event to discuss its strategy for absorbing Sun (JAVA) for the morning of Jan. 27. CEO Larry Ellison will host the event, which will be Webcast live from 9 am to 2 pm Pacific Time.

The EC’s full statement, below.

Mergers: Commission clears Oracle’s proposed acquisition of Sun Microsystems

The European Commission has approved under the EU Merger Regulation the proposed acquisition of US hardware and software vendor Sun Microsystems Inc. by Oracle Corporation, a US enterprise software company. After an in-depth examination, launched in September 2009 (see IP/09/1271 ), the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

Competition Commissioner Neelie Kroes said: “I am now satisfied that competition and innovation will be preserved on all the markets concerned. Oracle’s acquisition of Sun has the potential to revitalise important assets and create new and innovative products.”

Oracle is a supplier of business software, including middleware (i.e. software that connects software components applications), database software, enterprise application software and related services.

Sun provides network computing infrastructure solutions that include computer systems, software, storage and services. In 2008, Sun acquired the open source database, MySQL.

The Commission’s in-depth investigation, opened on 3 September 2009 assessed whether the acquisition of the world’s leading open source database MySQL by Oracle, the leading proprietary database vendor, would lead to a significant impediment of effective competition within the EEA. The database market is highly concentrated with the three main proprietary database vendors – Oracle, IBM and Microsoft – accounting for approximately 85% of the market in terms of revenue.

Although Sun’s share of the database market in terms of revenue is low, as users of MySQL can download and use the database for free, given its open source nature, the Commission’s investigation confirmed MySQL’s position as the leading open source database. The Commission’s investigation therefore focussed on the nature and extent of the competitive constraint that MySQL currently exerts on Oracle and whether this would be affected by the proposed transaction.

The Commission’s in-depth investigation showed that although MySQL and Oracle compete in certain parts of the database market, they are not close competitors in others, such as the high-end segment.

Given the open source nature of MySQL, the Commission also assessed Oracle’s ability and incentive to remove the constraint exerted by MySQL after the merger and the extent to which this constraint could, if necessary, be replaced by other actors on the database market.

The Commission’s investigation showed that another open source database, PostgreSQL, is considered by many database users to be a credible alternative to MySQL and could be expected to replace to some extent the competitive force currently exerted by MySQL on the database market. In addition, the Commission found that ‘forks’ (branches of the MySQL code base), which are legally possible given MySQL’s open source nature, might also develop in future to exercise a competitive constraint on Oracle in a sufficient and timely manner. Given the specificities of the open source software industry, the Commission also took into account Oracle’s public announcement of 14 December 2009 of a series of pledges to customers, users and developers of MySQL concerning issues such as the continued release of future versions of MySQL under the GPL (General Public Licence) open source licence. Oracle has already taken action to implement some of its pledges by making binding offers to third parties who currently have a licensing contract for MySQL with Sun to amend contracts. This is likely to allow third parties to continue to develop storage engines to be integrated with MySQL and to extend the functionality of MySQL.

The Commission also examined the potential impact of Oracle’s acquisition of the intellectual property (IP) rights connected to the Java development platform in the context of the proposed transaction.

It found that Oracle’s ability to deny its competitors access to important IP rights would be limited by the functioning of the Java Community Process (JCP) which is a participative process for developing and revising Java technology specifications involving numerous other important players in the IT industry, including Oracle’s competitors.

The Commission also found that Oracle would not have the incentives to restrict its competitors’ access to the Java IP rights as this would jeopardise the gains derived from broad adoption of the Java platform and therefore the proposed transaction would raise no competition concerns in respect of the licensing of IP rights connected with Java.

The Commission also examined the potential effects arising from the proposed transaction on the market for middleware and in the ‘IT stack’, where the merger would strengthen Oracle’s presence. It concluded that no competition concerns would arise in these areas in the light of the merged entity’s market shares and prevailing competition in the markets.

Either way, the deal is likely to officially close in early February.  And when it does, Oracle (ORCL) and Sun (JAVA) will be well prepared. “The integration team have been working very hard to complete all of the planning and executives on both sides of the merger believe that deal will be approved,” one source told me. “The majority of the hiring decisions have been made and the bulk of the product decisions and organization structure is completed.”

As part of its preparation, Oracle has written three email announcements, which it plans to distribute to Sun employees. The first, a congratulatory note for employees who will keep their jobs after the transition. The second, a notice of termination alerting employees who will lose their jobs. The third, an offer of a temporary position working through the transition is most likely to be distributed to employees in finance and human resources.

For rank-and-file Sun employees, the second notice is obviously ugly news. Not so for executives: The cash payout at the VP and officer level for being let go is quite generous, and I’m told a certain number of “howls of whoopee” can be expected from those in senior positions hoping for a pink slip.

And just how many pink slips are to be distributed? That’s unclear. I’ve heard from some sources that a significant reduction in workforce is almost certain. Others tell me “layoffs are not going to be anywhere near predictions.”

For the sake of Sun’s long-suffering employees, let’s hope it’s the latter.

Reached for comment, Sun declined to offer on”. “Sorry, we do not comment on rumors or speculation,” a spokesperson told me.

Seems that Oracle has decided that perhaps petulantly refusing to cooperate with the European Commission’s antitrust probe isn’t the best course of action here and has asked for “the opportunity to further develop its arguments in relation to the commission’s concerns.” Presumably, the company wouldn’t need such time if the EC’s objections were as baseless as it has argued. The standoff between the two, then, would appear to be over and we may see a solution to the matter early next year.

According to Oracle (ORCL) CEO Larry Ellison, Sun (JAVA) is already losing $100 million a month as it waits for regulatory approval, and judging from the price of the company’s stock today, it may be losing even more than that. Shares in Sun slid to $8.11–about 15 percent below Oracle’s offer price and a far cry from the $9.18 they hit in mid-October.

Clearly, investors are alarmed by this latest turn of events, though industry observers say there’s little reason for them to be. Morgan Stanley, for example, believes Oracle’s acquisition of Sun will win EU approval with few, if any, modifications to the MySQL database software about which regulators are so concerned.

“Based on our diligence, we believe the EC is likely to approve the deal with no remedies or remedies pertaining to MySQL’s licensing,” the research house said in a note to clients today. “It is highly unlikely that Oracle restructures the deal (e.g. spins MySQL) or walks away.”

Morgan Stanley’s call: The deal will go through and at $9.50 per share. As the firm notes, the EU hasn’t blocked a U.S.-based transaction since GE/Honeywell in 2001.