European Commission holds up Sun, Oracle deal

— 6:00 AM on November 10, 2009

Remember how Oracle and Sun shook hands on a $7.4-billion merger this spring? The U.S. Department of Justice okayed the deal in August, but now, the European Commission has thrown a wrench into the works. As the Associated Press reports, the Commission has issued a "statement of objections" concerning the merger.

Reportedly, the Commission fears the transaction would harm competition and hike prices by putting the biggest proprietary database, Oracle's namesake product, and the biggest open-source database, Sun's MySQL, under one roof. However, the AP says Sun noted in a Securities and Exchange Commission filing yesterday that the European Commission's statement is "the result only of a preliminary investigation." Sun and Oracle still have an opportunity to argue their case.

Oracle, for one, hopes to correct a "profound misunderstanding" in the European Commission's assessment. The AP quotes Oracle as saying, "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." In Oracle's view, the database market is home to "at least eight strong players."

The U.S. DoJ seems to share Oracle's view; it "stands by its earlier assessment that the combination of the two companies is 'unlikely to be anticompetitive,' primarily because there are a variety of competitors," in the AP's words. Regarding the European Commission's statement, the DoJ said, "We remain hopeful that the parties and the EC will reach a speedy resolution that benefits consumers in the commission's jurisdiction."

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