EC formally objects to Oracle buying Sun

The European Commission on Monday formally dug in its heels over Oracle's planned acquisition of Sun Microsystems, but Oracle accused the regulatory body of "profound misunderstanding" in a rebuttal that declared its intention to fight the opinion.

The regulatory body issued a statement of objections about the merger, according to a Securities and Exchange Commission filing from Sun Microsystems. The open-source MySQL database software is the sole issue of concern in the matter, Sun said in the filing.

"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 the filing.

Oracle, though, fired back immediately, saying the objection "reveals a profound misunderstanding of both database competition and open-source dynamics." And indicating that other technologies are in limbo during the European deliberations, Oracle said, "Oracle's acquisition of Sun is essential for competition in the high-end server market, for revitalizing Sparc, and Solaris and for strengthening the Java development platform."

Meanwhile, the U.S. Justice Department reiterated its stance that the acquisition isn't anticompetitive. But given the gulf between Oracle and EC perspectives and Oracle's unwillingness to spin the MySQL software group off, it appears the matter won't be resolved soon.

MySQL is open-source software, meaning anyone may see, modify, and distribute the human-readable source code that underlies the software package computers actually run. Oracle's core database product is proprietary, meaning they don't grant those freedoms. MySQL is used widely at Facebook and Google among other companies, and competes to some extent with Oracle's existing products, arguably indirectly by expanding into newer markets to which Oracle's software isn't as well-suited.

Oracle castigated the commission in its statement:

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.

The database market is intensely competitive with at least eight strong players, including IBM, Microsoft, Sybase and three distinct open-source vendors. Oracle and MySQL are very different database products. There is no basis in European law for objecting to a merger of two among eight firms selling differentiated products. Mergers like this occur regularly and have not been prohibited by United States or European regulators in decades...

Sun's customers universally support this merger and do not benefit from the continued uncertainty and delay. Oracle plans to vigorously oppose the Commission's Statement of Objections as the evidence against the Commission's position is overwhelming. 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 Justice Department, which is in Oracle's camp, detailed its reasoning in a statement from Deputy Assistant Attorney General Molly Boast of the Justice Department's Antitrust Division.

And though Boast pointed to the department's "strong and positive relationship on competition policy matters" with the EC, she also said, "At this point in its process, it appears that the EC holds a different view. We remain hopeful that the parties and the EC will reach a speedy resolution that benefits consumers in the commission's jurisdiction."

The Justice Department reasoned that there are other database packages available and that open-source projects can be forked by those who disagree with corporate sponsors' handling of the software.

"Several factors led the (Justice Department's antitrust) division to conclude that the proposed transaction is unlikely to be anticompetitive. There are many open-source and proprietary database competitors. The division concluded, based on the specific facts at issue in the transaction, that consumer harm is unlikely because customers would continue to have choices from a variety of well established and widely accepted database products," Boast said. "The department also concluded that there is a large community of developers and users of Sun's open source database with significant expertise in maintaining and improving the software, and who could support a derivative version of it."

[dylerl]

Good!! At least the EC understands something that our Justice Department cannot. Mysql and Oracle are competing products and if Oracle can kill it then that would be huge!!! Oracle needs to be stopped and they should not be allowed to buy Sun!!!!

[nazzdeq]

You are as ignorant as the EC. Anyone can branch off a copy of MySQL if they want to, nobody "controls" it. It is open source. That means you can download the source & modify it if you want. The original founders have already done so themselves and their new version is called MariaDB and is by the original founder of MySQL Michael "Monty" Widenius.

http://askmonty.org/wiki/index.php/MariaDB

[Super2online]

You can always count on the EC to try to wrestle as much money from US corporations as humanly possible, even if it looks unlikely.

[highguard01]

Yeah dude european union= empires they take our tax dollars threw the international unions
they have this thing called energy security i bet whatever sun micro whatever is has to do with solar energy how will the eu keep us enslaved to there capitol goals if we have free energies!!!

ok its not free you pay a small price and it just recycles threw the hours of the day they call this scalar energy get it time is money well now it can be your energy heating your home.ever since 1850
people studied these things. this is the kosovo war and iraq war problem.and now they want to stop iran from making nuclear metals

[slumbergod]

hmmmf why can't the European Union have rulings that are different to the US. For too long the world has followed every whim of the US but in recent years China and Europe have emerged as major players in the global economy. If they don't agree with the stance of USA good on them! Let Oracle go have a little cry about it.

[DemonDuck000]

"and for strengthening the Java development platform."

This is the first time Oracle has mentioned Java in any of it's press releases. So now all of a sudden it's concerned about Java when the EU tries to keep consolidation from diminishing competition and choice by asking Oracle to moderate it's plans only slightly.

Sounds a little thin to me... Like Oracle is feigning harm to something (Java) it doesn't care about just to get it's way.

[micko27]

Dude, you have no freaking idea what you're talking about. Java is probably *the* single most important thing Oracle is acquiring here. If you had any knowledge of existing middleware/web applications platforms that Oracle (and other companies such as IBM and Red Hat) produce, you would know this.

I think it is a very important point to bring up that this could hurt Java. Sun is the inventor and continues to be the main shepherd of Java, and as long as its future is in limbo, many parts of the Java ecosystem such as JavaFX and NetBeans are perceived as being in limbo as well.

[jbcahill]

Screw the European Commission. We LIKE to create jobs in this country. These are U.S. companies, who cares what a European bureaucratic body thinks.

[aussietech]

little bit short sighted here don't you think? Europe is a huge market for both products, if the EC decides the merger is illegal, it prevents Oracle from trading within the EU member nations (27 including MAJOR economies like Germany, France and GB). The EU as a combined economy (last set of figures I saw so may be a little off) is very close to being as large, if not larger than the US. Losing access to this market would be terrible for Oracle.

The US isn't the only large economy in the world and the opinion of the EU through the ECommission and EParliament are just as important as those of the US.

[catbutt5]

"short sighted" hardly...
The original poster isn't saying let's not sell to Europe, he's saying, what is the EU doing meddling with the merger of two U.S. based companies.
They may be "Global" but their papers of incorporation are filed in the U.S.A.
Does the EU want the U.S. meddling in every corporate merger between two EU companies? Of course not.
Mind your own business EU not that of others.

[Renegade Knight]

Whever you merge two companies you lose jobs. Thus the EC decision just did more for jobs in this country than the Department of Justice decision our own country made.

[highguard01]

all i got to say is hope all our govt. are prepared for when people find out that solar and wind power is
and always will be better then natural gas and none them can't put a meter on it. and if they did we wouldnt pay! And where starting to not like them as naighbors!

[Mr. Dee]

Serve them (Oracle and SUN) right. Now they know what it feels like when they tell lies and meddle in Microsoft's business in Europe. I hope this delay drains Larry for all he's got and then he begs Microsoft to buy them, Microsoft then dumps them a year later with a lovely press release on PressPass saying we often re-evaluate our business and Oracle was crap and we wanted to get rid of them anyway, Larry spends too much on his suits.

[t8]

What the EU is doing to Microsoft is justified. Microsoft break the rules because they can and the penalties are small enough to make it worth their while to continue touting the law. But the EU's hard stance has made them play ball.
Not sure if the EU is right with the Sun buy out though.

[opiapr]

If two US companies want to merge and the US agree with it why do they need the EU approval was next Chinas approval Iran Venezuela?

[Renegade Knight]

They do business in the EU, thus the EU approval. If all they did was serve the USA they would not need EU approval at all.

[kxmmxk]

I agree. Who cares if the EU likes it or not. They are American companies. And if the EU is really going to prevent everyone in Europe from using Oracle, MySQL, Java, or Solaris, well they will have a rather large problem on their hands, won't they!

Their stated intent is to try and harm American business so that they can get a leg up. We are crazy if we let them.

While it's good that Oracle and Sun are facing the wrath of the EU for unfairly instigating investigations into Microsoft, the US government must step in and stop the madness. These are U.S. companies and should be goverened by US laws. Congress needs to levy massive trade sanctions against all EU companies until that bogus extortionist court steps down. It's just too bad a company like MS or Oracle couldn't pull out of Europe, retract their licenses, and have those governments go under as the cost and time to move to competing products would be in the billions and take decades.

[dennis_the_bug]

Sorry dude. These are no longer US companies. These are global companies. Further, If a company is from US does not mean that US law is universal. If that is the case then visitors or companies from other countries should not follow US laws in US

[pokiri]

I understand Sun is sinking and laying off people in 1000s. But blocking the merger and having Sun invest more in MySQL ( i don't care whether they make profit or not ) and other open source technologies should be the right course. We want the world with open source tech, free software etc.

Sun is hemorrhaging because of the delay caused by the EC. Who wants to buy from a company that can't define it's product plans because it is held in limbo with the sale? At this rate SUN is taost if the merger doesn't complete...so where does that leave your open source MySQL? Now it benefits from Suns sponsorship as it will from Oracle. It is easy enough to put protections in place for MySQL and let the merger go through. In the meantime who is going to help the people losing their jobs becuase of some pompous govermental organization?

[Renegade Knight]

Sun is bleeding money in part because they decided to merge with Oracle to solve their problems. Oracle meanwhile sees Sun as a great acquistion because to be blunt Sun has more potential than Oracle. Oracle is a cash cow looking to grow. Sun is a growth machine but isn't sitting on a pile of money.

[Vegaman_Dan]

Dear European Union:

Thank you for your recent comments and concerns over the merging of Oracle and Sun. Your input is always welcome and we really do appreciate that you find it necessary to impose your demands and threats upon other countries. It's this sort of honesty that makes your actions very apparent to any and all those included.

Please note, however, that neither Oracle nor Sun are based in Europe. You have no power or influence in the decision of two US companies to merge. If you wish to file a protest, please do so with the World Trade Organization or the League of Nations... or someone who cares.

If you would like to continue your attempts to control the world through such actions, please let it be known that a couple of car dealerships in Iowa are planning to merge operations and while they do no business at all in Europe, it may be a wise idea to give your input and have them gain permission from you before taking any such action.

Thanks!


(Why is it the EU is becoming more and more of a mothering body in which companies have to ask, "Mother may I?" before doing anything anywhere these days?)

[gfsdfge]

So naive.....

[scarboroughbusiness]

Who do the EU think they are? Oracle should simply ignore them...if everyone did this, they would soon realise there position in life!

They seem to think that they can stick there nose in where its not needed even when they don't seem to have any relevant knowledge / experience to pass comment on these issues either.

Also, they seem to use these big companies as ATM machines...where does this money go!?!? Into some EU ministers pocket probably!

With all this in mind, I can see them allowing this merger but only if Oracle pay the EU some kind of fee (sorry...it would be a fine)! Extortion works in the same kind of way!

Maybe big companies should get together and sue the EU claiming that the EU is anti-competitive and should be broken into smaller chunks!!!! Play them at there own game (whatever that might be).

Again...who are these people that think they can stick there nose in!?!

[fafafooey]

What is the EUSSR going to do? Deny the acquisition and then pass a ruling that requires Sun to stay in business?

[Renegade Knight]

Excellent. I own Sun (about 0.00000000000001% of it anyway). and voted against the merger. The EC has done nothing but help me get my way wiht my own company.