Oracle’s Sun offer unlikely to win EU approval

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Oracle offered the EU’s antitrust regulator a set of new terms over the weekend intended to curry favour for its acquisition of Sun Microsystems. But sources close to the deal say Oracle’s “public remedies” are unlikely to satisfy the EU’s original objections to the deal.

At a two-day hearing in Brussels last week, Oracle, alongside customers such as mobile phone maker Ericsson, made its case for the Sun deal to go ahead. 

The EU executive issued a statement of objections to Oracle’s planned acquisition in mid-November, 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). 

EU Competition Commissioner Neelie Kroes repeated an earlier statement saying she was “optimistic there would be a satisfactory outcome”. 

“Today’s announcement by Oracle of a series of undertakings to customers, developers and users of MySQL is an important new element to be taken into account in the ongoing proceedings,” read a statement from the Commission on the hearing. 

However, sources close to the process say it is unlikely Kroes will approve such “public remedies”. 

Oracle will need to give new remedies 

In competition cases, the Commission usually keeps its cards very close to its chest, revealing very little information until remedies – such as the new offer made by Oracle – are run by third parties. 

Oracle effectively breached competition rules by going public with its remedies, say sources, who argue that the EU executive will likely ask for more remedies that are not public. 

The Commission is now regrouping and considering Oracle’s assurances, say other sources close to the deal. 

Oracle has made concessions to storage engine vendors on MySQL’s copyright and extended the terms and conditions of existing commercial licenses to “up to five years,” according to the Commission’s statement. 

MySQL customers lobbying against the deal say Oracle’s new terms are not far-reaching enough. 

Oracle received US antitrust approval for the acquisition in August. 

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. 

  • 27 Jan. 2010: Deadline for a final decision on the Oracle/Sun Microsystems transaction.

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