Are you talking to me?

Are you talking to me?

EU to probe Oracle’s $7.4bn Sun deal. By Nikki Tait in Brussels. Published: September 3 2009 12:44 | Last updated: September 3 2009 12:44. Concerns about potential implications for the market for databases has prompted Europe’s top competition regulator to instigate a full, in-depth probe into the proposed $7.4bn acquisition of Sun Microsystems by Oracle. Neelie Kroes, EU competition commissioner, said that the European Commission had an obligation to ensure that customers would not face reduced choice or higher prices. “Databases are a key element of company IT systems. In the current economic context, all companies are looking for cost-effective IT solutions and systems based on open-source software are increasingly emerging as viable alternatives to proprietary solutions,” she said. “The commission has to ensure that such alternatives would continue to be available.” Oracle is the market leader in terms of proprietary databases, while Sun has the MySQL product, which is quite widely-used, especially for large-scale web services, and is the leading open-source database. Other big competitors in the market are IBM and Microsoft. The commission – which is understood to have received submissions from interested third parties – said that, although MySQL is open-source, it was worried that that might not “eliminate fully” the potential for anti-competitive effects if the merger went ahead unconditionally. Accordingly, one of the issues addressed in the full probe will be Oracle’s incentive to further develop MySQL as an open-source database. The merger has already been cleared by anti-trust authorities in the US, although approval was delayed as the Department of Justice scrutinised licensing arrangements surrounding Java, the programming language and software development tools that are controlled by Sun. Commission officials confirmed that this was not an aspect of the deal which they wished to look into further. The deal was notified to the European authorities much later than to their US counterparts, at the end of July. To date, Sun and Oracle are not believed to have offered any undertakings to deal with the MySQL concerns. In principle, the commission’s probe could run until January 19 next year, seriously delaying the merger. But on Thursday, commission officials said that a decision could be taken more rapidly if issues were resolved. They described the full probe as “routine”, and legal obligation on the commission when “serious doubts” existed about the competitive effect of a deal. One possible outcome would be for the parties to seek to offer remedies, to address any concerns that persist on closer investigation.