After intense antitrust investigation focused on the MySQL database, the European Commission gives an official OK for Oracle to acquire Sun Microsystems.
Lance WhitneyContributing Writer
Lance Whitney is a freelance technology writer and trainer and a former IT professional. He's written for Time, CNET, PCMag, and several other publications. He's the author of two tech books--one on Windows and another on LinkedIn.
The European Commission has officially approved the Oracle-Sun merger, paving the way for Oracle to take over Sun Microsystems in a deal valued at more than $7 billion.
"I am now satisfied that competition and innovation will be preserved on all the markets concerned. Oracle's acquisition of Sun has the potential to revitalize important assets and create new and innovative products," said Neelie Kroes, the European antitrust commissioner, in a statement Thursday.
The approval by the EC, which faced a late-January deadline, comes after months of limbo during which the Commission expressed skepticism about the antitrust aspects of the proposed deal, first announced in April 2009. Concerns that Oracle's ownership of the MySQL software would pose a competitive threat in the database market prompted the European regulators to launch an in-depth investigation in September. Specifically, the Commission feared that MySQL's role as a leading open-source database might be jeopardized if Oracle, a software powerhouse built on its proprietary database, took ownership.
Oracle has an event planned for next Wednesday, open to customers, partners, press, and analysts, in which CEO Larry Ellison and other executives from both Oracle and Sun will discuss their strategy and road map for integrating the two companies and their respective products.
In now okaying the deal, the EC cited several factors that seemed to ease its mind.
The Commission said it found that "although MySQL and Oracle compete in certain parts of the database market, they are not close competitors in others, such as the high-end segment."
The EC, which is the regulatory arm of the European Union, also felt that even if Oracle were to limit MySQL's position as an open-source product, other open-source databases could rise to fill the void. In its investigation, the European regulators named the open-source database PostgreSQL, considered by many to be a viable alternative to MySQL. Additionally, they found that other forks of the MySQL code could also sprout quickly enough to provide competition to Oracle if necessary.
In addition, the EC was reassured by a series of pledges made by Oracle in December, in which the company promised to support and develop MySQL under an open-source license. Oracle committed to spend more on R&D, maintain healthy relations with third-party developers, and launch advisory boards to help guide the product's future.
Oracle has already made good on some of its pledges, the EC noted, by offering third parties the option to amend their license contracts for MySQL, allowing them to continue to build storage engines that integrate with the product and enhance its capabilities.
Besides its focus on MySQL, the Commission also considered the impact of Oracle owning Sun's Java platform, an issue that concerned the U.S. Justice Department before it okayed the merger.
The EC looked at the possibility that Oracle might prevent access to Java's intellectual property rights, especially to its competitors. But the commission felt that Oracle would gain nothing from such an action as this would actually limit the growth of Java. The company would also be restricted in tampering with Java's intellectual property by the involvement from other tech companies in the Java Community Process (JCP), which helps build and update specifications for Java technology.
Oracle seemed confident the deal would slide through until the European Commission stepped on the brakes in November by formally objecting to the merger, citing worries over an Oracle-controlled MySQL. Other prominent voices chimed in to raise similar fears, including MySQL co-founder Michael "Monty" Widenius, who urged Oracle to sell MySQL to move the deal forward.
In the meantime, Sun's future looked increasingly cloudy as the company lost money daily, and Sun customers were wooed by competitors IBM and Hewlett-Packard. But Oracle CEO Larry Ellison remained steadfast, vowing not to sell MySQL just to win approval and eventually placating the EC by issuing his list of pledges.
With the EC's nod, Oracle said it now expects unconditional approval from China and Russia and intends to close the deal shortly.
Updated at 7:31 a.m. PST with additional details from the European Commission's decision, and with background on Oracle's efforts to acquire Sun and at 10:20 a.m. PST to correct phrase Sun-controlled MySQL to Oracle-controlled MySQL.