Oracle gets more time to rethink Sun deal

Published: 24 November 2009

The European Commission has given Oracle an extension of six working days to rethink the purchase of rival firm, Sun Microsystems, and its popular MySQL database software.

Background

The MySQL database is run on open source code. Open source code gives businesses a relatively inexpensive tool to run their professional systems and services. At present, a license to use the code is available either under a General Public License (GNU) or from its current owner Sun. 

In practice, the GNU license limits a developer to adhere to its public licensing terms and a commercial license from Sun allows mobile phone services, for example, to negotiate the use and cost of the code. 

The EU executive issued a statement of objections to Oracle's planned acquisition last week, arguing that the group is already a dominant database distributor and that its potential ownership of MySQL would distort the market (EurActiv 16/11/09). 

MySQL's original developers and shareholders have backed the Commission, arguing that Oracle could control the use and development of MySQL on the marketplace to serve its own interests. 

The purchase of MySQL is not about market share in terms of sales, argues Florian Mueller, an ex-shareholder of the flagship open source software, but about market relevance. 

Mueller compared the importance of MySQL to Twitter, which currently has no revenues but great market relevance. 

In October, one of open source code's original authors appealed to the EU commissioner for competition, Neelie Kroes, to prevent Orcale's acquisition of Sun. 

"If Oracle is allowed to acquire MySQL, it will predictably limit the development of the functionality and performance of the MySQL software platform, leading to profound harm to those who use MySQL software to power applications," Richard Stallman of the Open Rights Group said in a letter to the commissioner. 

Oracle could cherry-pick MySQL's developers 

The European Commission has admitted it is worried about the potential conflict of interest between Oracle and businesses using the MySQL source code. 

Oracle could cherry-pick which businesses get MySQL's open-source licenses or could change the terms of the license agreements, preventing other companies from developing competing products, the EU executive's statement of objections reportedly said. 

Moreover, developers would not be able to commercialise innovations based on MySQL but only use them for internal business purposes if there was a conflict of interest, Mueller adds. 

MySQL 'vigorous competitor' 

Oracle argues that MySQL would not give it a competitive advantage because its own databases are used for large companies' offices and MySQL is used mainly by website developers. 

However, Mueller says MySQL's use is not as cut-and-dry as Oracle's statement makes out, and that the product is actually very popular with enterprise customers. 

In the EU's 155-page statement of objections, the competition watchdog concluded that "overall, MySQL is the most vigorous open-source competitor". 

"In the overall market for databases it is among the four top database vendors. It is a leading and important database vendor, which exerts a significant competitive constraint on Oracle and other proprietary database vendors like Microsoft and IBM," the document continued. 

Oracle is expected to provide the Commission with a 'remedy proposal' early next week. Failing that, the company has until mid-December to come up with a solution. One possible outcome could be the sale of MySQL to a third-party. 

Oracle has refused to comment on its position at this time. 

Next Steps

  • 2-6 December: Oracle expected to send European Commission a proposed remedy for the objections.
  • Mid-December: Second deadline for remedy.