EC launches investigation of Oracle-Sun deal

Jake Widman
Friday, 04 September 2009 01:34

IT Industry - Strategy

The European Commission confirmed today that it will take an "in-depth" look at Oracle's pending acquisition of Sun Microsystems. The Commission could take up until January to decide whether the merger would have a significant anticompetitive effect.

As hinted yesterday , the Commission is concerned about the union of Oracle software with Sun's MySQL database product.

In the announcement from the European Commision (EC), Competition Commissioner Neelie Kroes said, “The Commission has to examine very carefully the effects on competition in Europe when the world's leading proprietary database company proposes to take over the world's leading open source database company. In particular, the Commission has an obligation to ensure that customers would not face reduced choice or higher prices as a result of this takeover."

The release points out that a preliminary market investigation by the Commission determined that the two database products "compete directly in many sectors of the database market."

The Commission acknowledged that expressed concern that even though MySQL is open source, that might not be enough to guarantee its competitive position against Oracle.

One of the areas the investigation will focus on is how much incentive Oracle has to maintain MySQL development.

The investigation has a deadline of 90 working days, or until 19 January 2010, to reach a decision on the merger.

The US$7.4 billion deal was announced in April, and since then has gained approval from Sun shareholders and from the U.S. Department of Justice.