EU to investigate Oracle-Sun deal

Final approval of Oracle's $7.4 billion takeover of Sun Microsystems has just hit a snag, courtesy of European regulators.

The European Commission announced Thursday that it has launched an in-depth investigation into the proposed merger between Oracle and Sun. The agency said its preliminary probe raised concerns that the deal could threaten competition in the database market in the European Economic Area (EEA), an association composed of 30 different European countries.

That initial investigation showed that Oracle's proprietary databases and Sun's open-source MySQL compete directly in many areas of the market, so the Commission wants to address a number of issues, including Oracle's incentive to further develop MySQL as an open-source database.

Competition Commissioner Neelie Kroes said in a statement: "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. 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."

Pointing out the importance of databases to corporate IT systems, the Commission said that in light of the current economy, companies need cost-effective solutions. "And systems based on open-source software are increasingly emerging as viable alternatives to proprietary solutions," said Kroes. "The Commission has to ensure that such alternatives would continue to be available."

The Commission, which is the executive arm of the European Union, now has 90 working days, until January 19, 2010, to make a final decision on the merger.

Oracle had little comment except to say in a statement that the Commission had decided to "seek out more information regarding the merger by launching a Phase Two inquiry," which indicates a more in-depth follow-up to the initial probe.

The merger has already been approved by Sun stockholders and by the U.S. Justice Department.

[SIGHUP]

And the EU war on American technology companies continues.

[darkxeno]

I was going to say and the EU tries again for American Technology Companies pocket books.

[Renegade Knight]

If they want to win the war they would allow the merger and have 1 less company to deal with. If they are interested in the public benefit they would not allow the merger and keep them as competitors.

[pentest]

Just because the US rubber stamped it without any due diligence, doesn't mean the rest of the world has to pledge allegiance to corporate interests.

[SIGHUP]

@pentest

If the EU was doing it for the consumer that would be one thing, but they are doing it to protect EU business interest. Don't fool yourself into thinking that their government is any less corrupt than America's.

[3tire]

@pentest

On what do you base the "rubber stamp" comment?

[thelemurking]

pentest - what does the rest of the world have to do with 2 US companies seeking a merger? Do companies in France or Sweden need US permission to join forces?

If the world doesn't like it, then they don't have to buy the product. I'm fairly certain that's how a free market works.

[k9jdk]

Have to wonder just how many of these mergers have been given the thumbs down. Without doing extensive research on the matter (aka taking a SWAG), I'd guess not many.

[Renegade Knight]

The sharholders gave a fair percentage of thumbs down. Just not enough to carry the day. When it hits the government approvals. In the USA few if any get a thumbs down when most should since few mergers actually product any public beneift. Heck most mergers fail to produce any benefit for the merged companies.

[pokiri]

The deal was annouced in april '09 . Why is it taking that long for EU to do extensive probe ?
Meanwhile ibm and hp poaching Sun's customers partly due to the Oracle+Sun uncertainity !

[Len Bullard]

So now Nellie is a sword that cuts both ways? Oracle and Sun have been rather pleased with what she has done to Microsoft.

Ah the Spy Vs Spy of the shallow gene pool of the web is entertaining.

[Lennron]

Is anybody else getting really sick of the EU always pulling this ****?

[Lennron]

Sorry... pulling this "crap"

[joetesta70]

Will Sun just die already?