Server Farming

Jan 21 2010   2:17PM GMT

European Commission approves Oracle acquisition of Sun

Mark Fontecchio Mark Fontecchio Profile: Mark Fontecchio

The European Commission has approved the Oracle acquisition of Sun Microsystems, representing the last hurdle the database giant had to jump before the deal was done.

It has been nine months since Oracle announced its intention to purchase Sun, but regulatory issues have stymied progress on the deal. The U.S. Department of Justice gave its thumbs-up fairly quickly, but the tougher European Commission took more time. Both agencies wanted to make sure the deal wouldn’t violate antitrust regulations.

The EC ended up focusing much of its time on MySQL, the open source database that Sun bought in 2008. The question was whether Oracle’s acquisition of Sun would eventually quash MySQL. Apparently the EC was convinced enough that it wouldn’t happen, according to its statement:

Although Sun’s share of the database market in terms of revenue is low, as users of MySQL can download and use the database for free, given its open source nature, the Commission’s investigation confirmed MySQL’s position as the leading open source database. The Commission’s investigation therefore focussed on the nature and extent of the competitive constraint that MySQL currently exerts on Oracle and whether this would be affected by the proposed transaction.

The Commission’s in-depth investigation showed 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.

Given the open source nature of MySQL, the Commission also assessed Oracle’s ability and incentive to remove the constraint exerted by MySQL after the merger and the extent to which this constraint could, if necessary, be replaced by other actors on the database market.

The Commission’s investigation showed that another open source database, PostgreSQL, is considered by many database users to be a credible alternative to MySQL and could be expected to replace to some extent the competitive force currently exerted by MySQL on the database market. In addition, the Commission found that ‘forks’ (branches of the MySQL code base), which are legally possible given MySQL’s open source nature, might also develop in future to exercise a competitive constraint on Oracle in a sufficient and timely manner. Given the specificities of the open source software industry, the Commission also took into account Oracle’s public announcement of 14 December 2009 of a series of pledges to customers, users and developers of MySQL concerning issues such as the continued release of future versions of MySQL under the GPL (General Public Licence) open source licence. Oracle has already taken action to implement some of its pledges by making binding offers to third parties who currently have a licensing contract for MySQL with Sun to amend contracts. This is likely to allow third parties to continue to develop storage engines to be integrated with MySQL and to extend the functionality of MySQL.

“I am now satisfied that competition and innovation will be preserved on all the markets concerned,” competition commissioner Neelie Kroes said. “Oracle’s acquisition of Sun has the potential to revitalise important assets and create new and innovative products.”

Some stories we’ve done on the deal:

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